\ INDIA Rural Water Supply ~ 1 and Sanitation RuralWater Supply and Sanitation World Bank South Asia Region Rural DevelopmentSector Unit in collaborationwith The Governmentof India Ministryof Rural Areas and Employment (The Rajiv Gandhi National DrinkingWater Mission) DANIDA (Danish International Development Assistance) The World Bank Washington,D.C. ied Publishers New Delhi AlliedPublishersLimited Regd. Off: 15 J.N. Heredia Marg, Ballard Estate, Mumbai 400038 Prarthna Flats (2nd Floor),Navrangpura, Ahmedabad 380009 3-2-84416 & 7 Kachiguda Station Road, Hyderabad 500027 16-A Ashok Marg, Patiala House, Lucknow 226001 5th Main Road, Gandhinagar, Bangalore 560009 17 Chittaranjan Avenue, Calcutta 700072 81 Hill Road, Ramnagar, Nagpur 440010 13/14 Asaf Ali Road, New Delhi 110002 751 Anna Salai,Chennai 600002 First Published, 1999 O 1999 by The International Bank for Reconstruction and Development/The World Bank 1818 H Street, N.W. Washington, D.C. 20433,U.S.A. ISBN 0-8213-4463-3 ISBN 81-7023-908-7 This document was initially released as a World Bank report dated January 28, 1998. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any conse- quence of their use. The boundaries, colors, denominations, and other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement or acceptance of such bound- aries. Some sources cited in this paper may be informal documents that are not readily available. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without the prior permission of the copyright owner. Cover Design:Amy Meyer Phifer Photo Credit: World Bank Rural water supply and sanitation / World Bank South Asia Region Rural Development Sector Unit; in collaboration with The Govern- ment of India, Ministry of Rural Areas and Employment (The Rajiv Gandhi National Drinkirig Water Mission), DANIDA (Danish in- ternational Development Assistance) p. cm. Includes bibliographical references (p. ). ISBN 0-8213-4463-3 1.Water-supply, Rural - India - Finance. 2. Sanitation, Rural - India - Finance. 3. Economic assistance - India. I. World Bank. South Asia Region. Rural Development Sector Unit. 11.India. Ministry of Rural Areas and Employment. 111.DANIDA. HD 1698.14R87 1999 333.91'00954- dc21 99-13579 CIP Published by Sunil Sachdev and printed by Ravi Sachdev at Allied Publishers Ltd., Printing Division, A-104 Mayapuri, Phase-11, New Delhi 110064 v AbbreviationsandAcronymns vii Acknowledgements ix Bank Preface xi GO1Preface xiii Executive Summary I. Sector DevelopmentandAchievements 1 Evolution of policyframework 2 Sector developments,achievementsand issues 7 Contributionsof agenciesoutside government 2. InstitutionalFramework and Sustainability 13 Role and effectivenessof government agencies 18 Assessment of institutional performance 23 Decentralizationto locallevels 26 StrengtheningCommunity Participation 3. FinancialFramework andViability 29 Financingof sectorinvestmentsand operations 36 Cost recoveryand financial sustainability 41 Private sector financing 4. Strategy for Sector Reform 43 Goals and components 45 Thedemand-driven approach 52 Proposed plan of action Annex I.Key documentsfrom theWorkshopon RuralWater Supply and Sanitation Strategy.February 1997 Annex 2. Selective List of PersonsMet References Tables xx Table I. RecommendedPlan of Action-Summary 5 Table 1.1. Population Not Covered,PartiallyCovered,and Fully Coveredin India, by State,1994 16 Table 2.1. Functional Responsibilitiesof RuralWater SupplyAgenciesin India, byState 17 Table 2.2. Number and AveragePopulation byStateAdministrativeUnit 21 Table 2.3. Condition of Existing RuralWater SupplySchemes in India, 1994 22 Table 2.4. Advantagesand Disadvantagesof ExistingInstitutional Arrangements 23 Table 2.5. Institutional Pre-conditionsfor Managementof RuralI'iped Water Schemes 27 Table 2.6. Strengthsand Weaknessesof Gram Panchayatsand User Grmps 32 Table 3.1. CapitalCostAssumptions,byType of Technology 34 Table 3.2. Government Operations and Maintenance Expenditure Norms, by Type of Technology 34 Table 3.3. Operations and Maintenance Cost Assumptions,by Type of Technology 37 Table 3.4. A Comparison of Gram Panchayat Finances,Selected Indian States, 1989-90 38 Table 3.5. Block Administration Finances,SelectedStates, 1989-90 38 Table 3.6. Local Administration Finances,SelectedStates,1989-90 40 Table 3.7. Affordability of VariousTechnologies,in 1996 Pricesand 1995196 Income Projections,India 48 Table 4.1. Framework for Decentralizationof RWSS Functional Responsibilities 50 Table 4.2. Stakeholder Incentives and Disincentivesand Proposed Interventions 51 Table 4.3. Cost-Sharing Framework 51 Table 4.4. MatchingGrants as a Percentageof Total Local Administration Revenue, 1996-97 52 Table 4.5. StateversusLocalAdministration Finances 53 Table 4.6. Detailed Matrix of Recommendations Figures 4 Figure 1.1.Rural Water SupplyCoveragein India, 1960-95 30 Figure 3.1. WSS as a Percentageof the Central Government Budget, India, 1951-97 30 Figure 3.2. Rural Water Supplyand Sanitation as a Percentageof India's WSS Sector, 1951-97 31 Figure 3.3. Central and State Allocationsfor Rural WaterSupplyand Sanitation in India, 1980-95 33 Figure 3.4. Potential SectoralCapital Investment Requirementsin India,1996-2001 49 Figure 4.1. Changing Prioritiesof SectorAgencies Boxes ., 2 Box 1.1. Maharashtra Groundwater Act 10 Box 1.2.Sanitation Villages and Sanitation Gram Panchayats 10 Box 1.3. Women Masons 19 Box 2.1. Lessonsfrom the Community Water Supplyand Sanitation Project in Sri Lanka 27 Box 2.2. Local Organizations:Democratic,Representative, or Even Organized? 35 Box 3.1. Kerala Water Authority-PotentialImprovement in Operations and Maintenance Management 36 Box 3.2. A Detailed Look at Gram Panchayat Finances in Kerala,1990-91 40 Box 3.3. KeralaWaterAuthority-Improvement in Billingand Collection Rates Abbreviations and Acronyms AFARM Action for Agricultural Renewal 0&M Operations and Maintenance AFPRO Action for Food Production PHED Public Health Engineering Department ARWSP Accelerated Rural Water Supply Programme PMU Project Management Unit CAPART Council for Advancement of People's Action PRI Panchayat Raj Institutions and Rural Technology PWS Piped Water Supply CGWB Central Ground Water Board R&D Research & Development CPHEEO Central Public Health and Environmental RGNDWM Rajiv Gandhi National Drinking Water Engineering organisation Mission CRSP Central Rural Sanitation Programme RLEGP Rural LandlessEmployment Guarantee ESA External Support Agencies Programme GDP Gross Domestic Product RSM Rural Sanitation Marts GO1 Government of India RWS Rural Water Supply GP Gram Panchayat RW5S Rural Water Supply & Sanitation HUDCO Housing and Urban Development SEU Socio-Economic Unit Corporation SGO State Groundwater Organisations IEC Information Education Communication UP Uttar Pradesh IRC International Reference Center VWSC Village Water Supply Comnnirtee lpcd Liter per capita per day ZP Zilla Panchayat MIS Management Information System ZPED Zilla Panchayat Engineering Department MNP Minimum Needs Programme NAWDA National Association for Water Resources Development Agencies Exchange Rates and Equivalent!; NC Non-Covered NGO Non Government Organisation Exchange Rate: Rs. 35 = US$ 1.00 (Tanuary1997) NREP National Rural Employment Programme Indian Fiscal Year: April 1-March 31 Country Director Edwin R. Lim , Sector Managers Ridwan AliIMichaelBaxter Acknowledgments T his report was prepared by a team of consultants comprisingVagn Rehoej ('Team Leader),Elaine Glennie,ShyamalaAbeyratne and JensSjoerslev, who were financed with assistance from the Government of Denmark, and by Christina Wood and Keith Oblitas (TaskManagers,World Bank).The work has been undertaken as a joint Government of India and World Bank effort, and officialsfrom the Rajiv Gandhi National Drinking Water Mission (RGNDWM)have taken active part in all stages of the study. The RGNDWM were represented in the study by assistance were received from Messrs./Mnies:S. Barghouti, Messrs.: P. Mohandas (Director),D. K. Bhalla,K. Mazumdar, J. Williamson, J. Sara, L. Obeng, S. Abhyankar,S. Sarkar, B. C. Ganapati, V. Raghu, R. M. Deshpande, D. Chandi and K. Grover, R. Boydell, R. Kvam, K. McLean, R. Robelus, W. Moorty. Significantcontributions to the studyhave also been McCarten, B. Blarel, C. Couzens and M. Whitbread of the received from government officials in the six states visited Bank.We gratefullyacknowledgethe invaluable editorial in- (Punjab,Maharashtra, Uttar Pradesh,West Bengal,Karnataka puts provided by Elizabeth Forsyth. and Kerala). Preliminary report findings and recommenda- The assistance and advice provided by the Ministry of tions were discussed at a workshop held in February 1997 RuralAreas and Employment, the Planning Commission, the and chaired by the Ministry of RuralAreas and Employment Ministry of Finance, the Central Ground Water Board, and and RGNDWM. The workshop was attended by state and not least bythe governments of the six statesvisited,hasbeen central government officials, academics, NGO representa- most valuableand is highly appreciated.Significantand ben- tives,the World Bank and other external agencies, and pro- eficial contributions were also provided by bilateral and vided particularly valuable guidance for the report multilateralexternalsupport agencies. TheWorld Bank's resi- finalization phase (workshop proceedings are at Annex 1). dent mission in New Delhi and the UN-World Bank From the Bank, Ms. C. Wood,Mr. K. Oblitas (TaskMan- RegionalWater &Sanitgtion Group for SouthAsia provided agers for the sector review) and Mr. K. Jensen steered the inputs and assistancethroughout the work. Numerous con- study team during all stages of the work, and report final- sultations with a number of personsfrom government aswell ization was undertaken by C. Wood and K. Oblitas, in liai- as non-government sectorswerebeneficial to the report, and son with Mr. P. oha and as. Valuable review comments and these are also gratefully acknowledged. TheWorld Bank lata H s m t N.W. .(2021sn-123~ IIITERNATIOMALBANK FOR RECONSTRUCTlONAN0 OWELOPMENT Washington. O.C. 20433 INTERNATIONAL OEVELOPldENTASSOCLAMN U.S.A. CablIaAddnsu: MOWAS PREFACE INDL4 Water Resources~MonPgemrnrSector Reyiew - Rwai Water Supply & Sanirarion Componenr I?epo&t India has invested much effort in bringing suppiies of safe and ciem water to the countryside in the hdf cenw! since independence. and. in terns of the numberof people that now have access to mcdern supplies or' water, the achievement is indeed impressive. It is nonetheiess me h t thereis a great deal of concern abcut both the qdiry and quantity ciwatater :eacfhirig those who do have access. as well as the difficultiesof those sull without my access at ail. Too many investments fail to take adequate acc:ount of&e needs of water users, while maintenanceis rhzeatened by a shortage of finance and &e concentration cf resconsibiii~jin the hands of remote bureaucracies. One of rhe recwhg rhemes in the Bank's five volume study of Water Rzsourses Managernem in iadia, of which his srudy comprises one cornFonent, is the need to devolve decision-m.&g powers down :o ~e local leveI where end-users will have both the incen~iveand the opportuniry to iniriate jrompt action. I had the pleasure of participating in the Rural Water Supply and Sanitation Workshop held in Del& i~February 1997, jointly sponsored by the Rajiv GandhiRural Drirzbg Water Mission (Ministrjof Rural Ares and Employment) and the Bank, at which a draft of this report was discussed. It wu refreshing to witness the way in which the report's main themes already seemed to be owned by the Indian participants. One could hardly ezvisage a starker contrast with the stereotypical view of how tle Bank first decides what should be done, then imposes this decision via conditionality,and firnaliy reiies on the Sovernmentto force acceptance on an unwilling populace. Even though this stereorfie is just that. and not a picme of how the Bank usually operates, one may still fee!that the participatoryand-collaborativeway in which this report was prepared with die indan govemmect as a partner adwide consuitation duricg the processof drafting, provides something of a rnodei. T'e report will sureIy contribute to the Bank.'s lending p r o m in the water sector and to India's formuiation of better policies inthe sector. John Williamson Chief Economist, South Asia Region m m *ih**m TJFf'mmh -n;fraslijr*;m;rr;rh *.*.*. 'm.e-1W.9**, W&W. GF, m - 1 1 0 003 Government of hdia Ministry of Rural Areas and Employment rn- Department of Rural Developrne~nt rrgrn*p4mmFx Raiiv Gandhi National Drinking Water IUission Palat Mohandas Paryavaran 3havan. 3-; Block. 9th Floor. C.G.C. Complex. L:ahi iload,New Oalhi-710 003 Jolnt Secrstarj and M~ss~on O~rector Tei. No.4361043 Fax No.4364113 India has achieved considerable success in providkg safe dridurig water to about 85% of hzr rural population by tapping sound and surface water tiirouefi 3 mil!iow handpumps, thousands of water supply schemes md traditional sowct:;. Tns Govemmenr of India is comrnirted to provide safe drinking water faciliries 10 dl Nor Covered and Poorly Covered habitations in the Lwalareas within rhe next two years and also increase the water availability Ievel to ti12 national norm of 40 ipcd to ail the Partially Covered habitations by 2000 ,AD. Despite the impressive coverage of provision of safe cki~2&:g water ftcilities in the m a l areas, there are certai? areas of serious concern. The issue of s u s ~ n ; i t i lansf i ~ maintenance of quality aof waxer supplied are cited as the twc major conserainn in achieving the avowed objectives. Fylrther, the entire progrimme, so far nrpl ahlosr totally managed by the Government, without the a c ~ v eparticipation of the s~&eh,;ldsi-s~has created a scenario, in which water is taken as a fiee(servicej commodity and r&g he entire operation is a totally Government responsibiliiy. This, inevirzbiy has resulted in stifling the deveioprnent of more er"frciexitand lower cost options for service delivey and also denying an opportunity ro ~ 5 eIaers in exercising their option as corlsurners to demanda berter service. In the years to come, the m l water supply programme is sure to h c e serious challenges by way of meering the expanding needs of a faso gowing population, a we!l as the increasing demand of tne population fer bigher service levels. hcidi:ntaily, &e Working Group for the grnFive Year P!an(1998-2002) of M i a fcr mdware: supply and sanitation programmes has pct the requirement of ~ k d at a sraggering s abnoairat of Rs. 40,000 crore, keeping in view the measures to be undertaken to sustain &e ;vares suppiy andsanitation services. In the context of both the resourct constraints and t!e compering ders;wds on resources and inter se priorities, it is unlikely that the Governmenr aloiie would be ina position to mobilise the projected demand of h d s in a period of 5 years d~ringthe 9& Plan period. Given the circumstances, cost sharing by concerned instiations right from the users, Panchagrati Raj Instinruons, the State Gove-ects and the central Government has to be seriousiy considered. The cost sharing arrangement. so worked out would entail involvement of the usen and the supporc~i~gagencies like the Panchayau Raj Institutions to own, operate and inanage the drinking water supplysystems. The adoption of the demand driven approach replacing the present supply focused approachis agrerequisite for evalvingsuitable cost sharing practices with active participationof the stakeholders.Public education and widespreadcommunication, aimed athczeasiagthe stakeholders' participation in the entirescheme of thingsand if milected through appropriate cost sking instruments, would convince .dl concerned of the qgropx=iateness of the appr~achand would pave way fcr creating sustainable nual water supply a d sanitation faci:ides in the countrj. !n this backgomd. the report on the R d Water Supply and Sanitation by the WczM as pa-t o ia e 'driater Resources Management Wor!c, dwells on the policy aad co of *Jlis sector, institutional and financial issues related to sector rekrm process and advocates an approach to bring about radical reforms in the sector. As the C%.weme,t or"India, ifl ssociation.with the State Governments, is ia he process of formularing and imgiemenung d kter supply programmes with sharp focus on sustainabiiiq~and quality dwkg the Ninth Five Year Plan, the report is -aelcauie as it would ce&y grve a friiip to the sector rerbrn processes initiated with tremendous op&sm. Executive Summary Background S ince the beginning of the Sixth Five-Year Plan (1980-85) and the launch of the Interna- tional DrinkingWater Supply and Sanitation Decade,India has substantially increased its commitment to the water supply and sanitation sector. Sector investments have increased and presently constitute about 3 percent of the national budget. Of the total budget allocated to the sector,approximately 60 percent has been earmarked for rural areas. Although the constitu- tion considers rural water supply and sanitation to be the financial responsibility of state ad- ministrations, central government funding constitutes 40 percent of total investment in the sector.Significant achievements in coveragehave been realized, with over 75 perc~entof the rural population (or 520 million people) now provided with public water supply facilities. Achievementsin sanitation coverage have been less extensive, due to the lower attention it received compared with water supply. Only 3.6 percent of the rural population is covered at present; however, actions to improve coverage of sanitation have been stepped up recently, through provision of subsidies and technical assistance for holusehold construction of sanita- tion facilities. National guidelines and investments in the rural water to users and their communities, in order for the assets an2 supply and sanitation (RWSS) sector, which have tradition- services to be sustainable. It will be essential, moreover, to ally focused on extending coverage to rural areas, negiected shift from the target-oriented,supply-driven approach which to ensure that the quality of services to rural areas remained paysscant attention to the pracciccs and preferences of end- adequate. Public RWSS services today clearly do not ad- users, to a demand-driven approach which provid-PS users equately serve the needs of user communities. They are typi- with the services they want and are willing to pay for. cally poorly designed and constructed, oftentimes designed The government now rkcognizes the need i.o improve and positioned at sites without consideration to community the functioning and sustainability of the sector. Specifically, needs or preferences. Planning of RWSS services also takes the government is committed to the following principles, as place without due attention to resource availability or qual- stated in the Eighth Five-Year Plan ( I 992-97): (i) water ity, and is rarely financially vizble. The end result is a gov- should be managed as a commodity; (ii) the provision of ernment dominated and target-driven service that has RWSS services should be based on expiressed demand; (iii) become unsustainable institutionally, financially and envi- emphasis should be placed on decentralization, user partici- ronmentally. There is growing awareness that in order to be pation and private sector involvement; (iv) operation and effective, sector investments should be designed in accor- maintenance should be managed at the local level with em- dance with the needs and demands of users. There should phasis on financial sustainability; and (v) sanitation pro- also be a transfer of ultimate ownership and responsibilities grams should be integrated with those of water supply. In practice,however,these principles haveseldom been reflected threaten the success of the decentralization effort. Monitor- insectoroperations for lack of effective mechanismsto trans- ing and evaluation of resources, abstraction and quality of late the policy statements into action. A contributing factor groundwater are generallyfragmented and driven by the in- that has impeded rather than aided in achieving the stated terests and objectives of various agencies. policy objectives of decentralized planning and implemen- tation, demand-led investment, user involvement and cost Institutional Performance and Issues recovery, has been the availability of unconditional RWSS The current emphasis on targets and norms encourages ex- sector funding from the centralto the state governments.The cessive investment, undermines efficiency, and deters the target-oriented approach continues to guide activities and transfer of ownership to the institutions responsiblefor op- investments in the sector. Until the policy is linked to deci- erations and maintenance. Government domination of sec- sions regarding the investment program and effectivemecha- tor serviceshas limited the potential scope for participation nisms are established to guide sectoral operations, the by non-governmental organizations and, to an even greater coverage and quality of services will remain inadequate and degree, the private sector. The weak incentive structure in sectorviability,both institutionally and financially,will con- the sector, including lack of financial discipline, cost mini- tinue to deteriorate. mization or commercial culture, or orientation toward con- sumers,heightensthe perceived risk to the private sector and Sector Issues and Assessment curtails their potential involvement.Most important of all, village user communities have been insufficiently involved Protection ofWater Sources in the process. Protecting both the sustainable yield and quality of ground- One of the impacts of the sector's target-driven ob- water is critical to maintaining the sustainabilityof existing jective has been an inadequate planning and assessment RWSS investmentsas well as to meetingfuture requirements process prior to investment. No attempt is made, for ex- with potable and affordable services. In addition to being ample, to assess the extent and status of privately-financed the primary drinking water source for privately funded sources, even when they may constitute the primary schemes,groundwater supplies85 percent of the rural popu- drinking water source of a community. Neither are user lation served by publicschemes. The need to protect ground- preferences and willingness to pay for different levels of water for drinking purposes,however,has conflicted with the service ascertained. Effective planning is hampered by in- government's food security objectives and subsidies to the herent institutional incentives to build more or better, agricultural sector. These have encouraged the rapid and rather than affordable and appropriate, schemes. Planning unregulated development of groundwater for irrigation.The is further constrained by rigid design norms and lack of result has been the over-extraction of groundwater and in integration of environmental sanitation with water sup- certain localities, the depletion and contamination of ply programs. Weak performance also extends to the qual- groundwater resources. ity of hydrogeological investigations, improper designs Seasonalor permanent depletion of groundwater aqui- and construction, that have led to substantial cost over- fers has serious social, financial, and institutional implica- runs. Quality assurance and supervision activities are lim- tions for the supply of drinking water in rural areas, ited despite a comprehensive set of official controls. including the need to continually replace dried-up water Monitoring and evaluation of central and state-financed sources.Such replacement needs, particularly where requir- programs by and large have been limited to ensuring that ing more complex and expensive technologies (such as a central government funding is allocated as required. piped scheme from a more distant source or one requiring According to the recent 73rd and 74th constitutional treatinent facilities),have higher capital and recurrent costs, amendments, the states are devolving activitiesand respon- estimated on the order of 1,000 to 1,500 percent, compared sibilities for development to the panchayati raj institutions. with existingsystems.The relativelyadvanced schemes,fur- The constitutional amendments envisaged that the RWSS thermore, are generally difficult to operate and maintain at sector (consisting mostly of hand or small power pumps) the local level given the lack of technicalskills,which would would lend itself better to a decentralized structure, with xiv engineers at the district and block levels to plan and imple- Responsibility for management and operation of rural ment programs. Decentralization to lower levels was also sanitation,including waste disposalin small towns and pro- expectedto facilitate integration of sanitation and water sup- vision of latrine and environmentalsanitation services,have ply services, to ease the transfer of schemes to panchayats also been devolved to the gram panchayats. Environmental for operation and maintenance, and to engage user commu- sanitation consisting mainly of sullage and storm drainage nities in sectoral decision making. Due partly to problems is fundedlargelyunder an employment-generation program associated with financing from multiple sources,and the lack and is not integrated with water supply programs. Due to of managerial capacity to undertake demand-driven activi- limited capacity or interest in implementing what are typi- ties,the anticipated benefits of decentralization have not yet cally scattered rather than comprehensive sanitation pro- materialized. grams, progress under the government's rural sanitation Instead, though decentralization is only beginning in program has been veryslow. most states, there is evidence already that the process is Lack of integration of sanitation with water supply op- fraught with difficulties.Decentralization has simply passed erations has compounded the managerial difficulties the problems inherent in the state level engineering agency panchayats face in the sector. The inattention to hygiene on to the decentralized sector agencies. Even in states with practices, stemming from the failure to1integrate sanitation relatively strong panchayat institutions, progress with de- programs with programs deliveringhealth and hygiene edu- centralization has been inadequate. The impact of decen- cation, preventsthe realizationof significanthealth and eco- tralization so far has been a wide distribution of nomic benefits. There is also little or no follow-up responsibilities across agencies (without corresponding monitoringor evaluation of programs, and communities are strengthening of inter-agency coordination mechanisms), unaware of, or llack access to, low-cost investment options. and a weakening of accountabilities. State-levelagenciesby Absence of these programs curtail the emergenceof demand and large retain a limited role in technology selection, for sanitation facilitiesin rural areas,thereby precluding im- scheme sanctioning, monitoring and training. State public provements in current sanitation and hygienic practices. health engineering departments also conduct investigations High subsidies provided by central and local governments and drilling, while the district zilla parishad engineering for relativelyexpensivelatrines,furthermore, inhibit the abil- departments now plan and execute works. Poor liaison be- ity of local agenciesto work toward financial sustainability tween departments and an inefficient financial and tech- of sanitation services. nical approvals process, however, inordinately delay the implementation of sectoral programs. FinancialIssues Though local level panchayats are now responsible for Despite the significant gains in extending rural water sup- operations and maintenance of commissioned schemes, ply, the increasing level of government investment has not they are reluctant to assume this role. Reasonsfor this vary been matched by a proportionate increase in coverage,and but include lack of managerial autonomy, inadequate staff has become less efficient over time. 'The sector has expe- and financial support from the state government, the typi- rienced rising per capita costs due to the increased invest- cally low quality of the schemes planned and constructed ment in the more expensive piped water schemes without their participation, and a lack of ownership of compared with handpumps, and increasingly inefficient the assets. In consequence, the state government contin- procurement practices. Total capital investment require- ues to own the assets, supply the technology, and deliver ments, to fully cover rural populations and restore func- the services. Despite these external factors, the panchayats tionality (i.e. repair or rehabilita~tion)of distressed themselves face many inherent problems, which inhibit schemes, are estimated to range from Rs. 170 billion to them from taking advantage of the limited autonomy of- Rs. 200 billiop as a lower bound. If, however, national fered them under the constitutional amendments. These RWSS objectives are to be achieved (i.e. that a minimal include a historical reliance on central and state guidance level of 40 lpcd is provided, all schemes are made opera- and funding, weak capacity, high politicization, and lim- tional, and fully depreciated schemes are replaced) within ited resources. 10years, the capital investment budget will have to be at least two and a half times its existing level of Rs. 16-18 An estimated Rs. 29 billion (US$830 million) is re- billion (US$450-5 15 million) annually. quired annually to fund the appropriate levelof operations Achieving sector objectiveswill be challengingand will and maintenance in the sector, excluding provisioning for definitelyrequire a significantimprovement in the efficiency depreciation of assets. This includes salaries, electricity of government investments, but this will not be sufficient. (where required), chemicalsand routine preventative main- Given fiscal deficit reduction goals and competing govern- tenance as well as repairs. In absence of adequate cost re- ment priorities, substantial increases in government alloca- covery, the government is responsible for adequatsly tion are unlikely.At present, funding from external support funding 0&M requirements, yet current funding alloca- agencies equals only 3 to 5 percent of the existing annual tions are grossly inadequate at about Rs. 2.5 billion (repre- C capital investment in the sector and,is unlikelyto have more senting a twelfth of the estimated requirements). Funding than limited impact on RWSS asset creation in view of the constraints furthermore have crowded out allocations to enormous capital investment needs. Possibilities for direct the works component of 0&M,due to absorption by the investment by the corporate private sector is also limited, salariesand overhead component. Continued underfunding given the high inherent risk, long payback periods and low of operations and maintenance will have serious financial profitabilityof the sector. Supplementary financingfrom the implications due to the resultant growing need for major private sector or capital markets could and will likely need repairs or rehabilitation, which typically cost more than to be forthcoming; however, private financing could be ac- preventive maintenance. Existingsystems would also likely cessible only if sector operations are elevated to a commer- have to be replaced prematurely. cial level, including strengthening of financial management Total expenditure on local administration is about Rs. processes. Necessary first steps will have to be the realiza- 170 per capita, or 6.6 percent of total government expen- tion of full recurrent cost recovery from users, capital cost diture annually. According to a 1992 study of local gov- sharing by users and government, and a reduction in opera- ernment finances, local expenditure in 1986-87 as a tional costs. percentage of total government expenditure was only 2.9 The broader concept of financial sustainability for the percent for rural areas. Clearly, financial resources and fi- RWSS sector has yet to catch hold in India; and while the nancial autonomy have yet to be devolved to the local level narrow concept of OSrM cost recovery has been accepted and do not match the responsibilities now under local ju- dS a policy objectnve, very little has been done to imple- risdiction. Gram panchayats are expected to assume the ment it. Except for some localitiessupported by externally- greatest responsibilities without adequate levelsof person- funded RWSS projects, fees for rural water services are nel and financial resources, nor adequate financial au- typically indirect: many states include a nominal water tonomy. While self-financing through cost recovery will charge in local building or land taxes. In almost all cases likely be difficult to implement, it could be achieved with where rural water fees are actually levied, the amounts are appropriate policy and political support and a general nominal and charged only to households or commercial shift in institutional and public perceptions regarding enterprises that are served by individual connections. No ownership, the need for cost effective operations and charges are levied to recover capital costs. The CentrdlWa- maintenance programs, and a reorientation of users' per- ter Commission reports that cost recovery of working ex- ceptions to one where they expect to pay for good qual- penses kbr rural water supply schemesin 1991-92 was about ity services they want and can afford. 1.8 percent, and less than 1.3 percent of total outlaysif capi- tal costs are factored in. In the absence of a separate ac- Sector Reform Strategy counting and financial reporting system for the sector, an2 the general lack of transparency, the amounts collected dis- Whilethe Eipth Five-YearPlan recognizesthe keyissuesand appeal; into a general government fund rather than being problems :onfronting the sector, sector programs fall short applied directly for sectoral expenses. The inadequate fi- of implementing the Plan. The reform strategyproposed here nancial accounting system further aggravates the ability to coincidesalmost verbatim with the points highlightedin the attend effectively to cost recovery concerns. Plan. However, it goes much further to strengthen the Plan's policystatements and identify actions required to implement Conditionality for disbursement of funds must be explic- the Plan. The recommended reform strategy has three ob- itly defined, and strictly adhered to. This will be used to jectives.First, is to ensureanenablingenvironmentfor re- phase out the target-driven approach and government form, i.e. a policy framework that politically, legally and subsidies, and to phase in a demand-driven approach and institutionally supports the reform process.Second,is to es- full cost recovery. Public education and widespread com- tablish institutional sustainability by: clarifying and ra- munication will set the stage by convincing voters and tionalizing the roles and responsibilities of the various politicians of the need and benefits of making and imple- sectoralagencies;strengtheningthe facilitationor implemen- menting difficult cost-sharing and cost recovery decisions. tation capacity of existing agencies,as appropriate given the Implementation of a participatory demand-driven ap- identified roles;supporting the decentralization process and proach will ensure that users can directly influence the devolving of responsibilities to villagewater committees and level of service they desire and can afford; (andfull cost the panchayat raj institutions,including involvement where recovery will ensure financial viability and snstainability. appropriate of NGOs; and, achieving full participation of Finally, supporting public sector reform and institutional user communities in sectoral decision making and project strengthening will ensure sustainability. External agencies implementation. Third, is to establish financial viabiity can facilitate by supporting these reform efforts. Exter- andsustainabilityby implementing policiesand actions to nally funded projects should be consistent ~ ~ ithehrec- t achieve capital cost sharing, full recurrent cost recovery and ommendations of this report and should assist the Rajiv reductions of operating costs. Finally, an important re- Gandhi National Drinking Water Mission and the state sourcesmanagementobjective-to ensure adequate quan- governments in its implementation. tities and quality of water resources for domestic needs - must also be addressed. Institutional Sustainability From an institutional perspective, the strategy recommends Enabling Environment for Reform supporting the transfer of management and financial re- Several factors pose major risks to reform of the rural wa- sponsibility to the lowest appropriate level, i.e. the ter supply and sanitation sector. These include: (i) a wa- panchayat raj institutions and, in particular, user commu- vering willingness to charge for a good whose provision nity groups. Transfer of responsibility would require cor- has traditionally been treated as a government responsi- responding provision of management and financial bility; (ii) the pace at which the 73rd and 74th amend- autonomy to local administrations and u'ser communities, ments to the Panchayat Raj Act are being implemented as adequate and appropriate for their roles. Given the re- in each state; (iii) the pace and degree to which decen- sponsibility and autonomy, these local groups will be tasked tralization will occur; and (iv) the pace at which public with overseeing planning and implementing sector activi- administration or civil service reforms are undertaken. ties. If required, these local groups would then be able to Each is highly subject to political will and the extent of obtain a higher quality of services and minimize unit costs, government commitment. These constraints will have to through competitive selection of service providers among be overcome through development of sector policy docu- existing public agencies, non-governmental olrganizations, ments at state level particularly, and securing of commit- and the private sector. ment to the reform program. Gram panchayats, and user community groups created The proposed strategy focuses on establishing an en- under the panchayats, will require basic capacity strength- abling environment to support strengthening of institu- ening for their new roles. They will also need sufficient in- tions and financial viability, which will serve the broader centives to increase their level of self-generated income and objectives of public administration reform. The general become more independent. In addition they will require: an approach focuses on several themes. During a transition understanding of the demand-driven approach and how to .> phase, financial conditionality with the allocation of cen- assess and meet community needs; the autonomy to priori- tqal and state funds will need to be the major force driv- tize and choose investments that best satisfy community ing the reform process at both state and local levels. needs; an ability to assess and appreciate the financial and social implications of their investment decisions;and an un- During the transition period, the proposed strategy is derstanding of available technologies and how and from to fully recover recurrent costs (i.e. O&M) immediately whom to best procure them. The panchayat raj institutions, through user charges. The strategy further envisionsan equal with their user community groups, can improve the admin- sharingof capitalcosts between state and centergovernments istration and provision of basicservices to rural areas if they on the one hand, and panchayats and userson the other. For are given the opportunity, support, and resources to do so. new schemes,a nominal 10 percent share of capital costs as Achieving institutional sustainability will also entail a minimum will be required from users,as an equitable com- strengthening the general management capacityof state and promise between the old and new pricing regimes. The re- local water and sanitation agencies while at the same time mainder of costs would be shared by the various restructuring those organizations so that they may imple- governmental levels: 40 percent borne by panchayats out of ment a delivery system oriented toward customer service. their general tax receipts, and 25 percent each will be paid State and district RWSS agenciesas well as the central agency by center and state levels. For scheme rehabilitation and re- will further need to build up a capacity to facilitate the for- placement,usersand the three administrative levels will each mation, strengthening and operational activitiesof local level bear 25 percent of the capital costs, making them equal part- entities. Equally important is the need to encourage the par- ners in the sector. ticipation of non-governmental organizations and the pri- The pre-defined capital cost sharing formula is ex- vate sector by making the regulations and procedures pected to drive investments and serve as a financial condi- governing procurement and contracts more flexible,and of- tionality for matching funding, as well as enable a more fering financial incentives in the f ~ r mof preferential rates demand-driven approach to emerge. Capital cost contri- or tax incentives. NGOs, for example, play a critical role as butions from users will encourage affordable investment facilitators for user community group formation and profiles and more realistic user expectations, while match- strengthening in the ongoing Bank-assisted Uttar Pradesh ing government funding will be conditional on the imple- RuralWaterSupply and Sanitation Project,as well as in vari- mentation of tariffs to recover the full cost of operations ous initiatives in other states. and maintenance and establish an adequate replacement fund. Coming full circle, full cost recovery of both recur- FinancialViability and Sustainability ring and replacement costs will enable responsible local ad- Provision of water supply and sanitation services have an ministrations to maintain assets properly and sustain economic value not only to society but also to private us- adequate levels of services at affordable prices. In the long ers. Continued subsidization of sector services by the gov- term, it will also ensure the financial viability and ernment distorts the signals to users of the scarcity value sustainability of investments in the sector. of water. It also undermines any efforts to promote a more Establishingfinancial viability and sustainability of the efficient and sustainable use of water. Substantial central RWSS sector will be critical for attracting private sector fi- and state funding, moreover, encourages local adminis- nancing for capital investments to bridge the gap between trations to make unbounded requests on behalf of their government resources and sectoral needs. This would be in constituents, while discouraging the assumption of re- addition to the already substantial own-financing of RWSS sponsibility for operations and maintenance at local lev- facilities by households and non-governmental organiza- els. Without an effective program to recover costs of tions. The sector does not currently offer sufficientlyattrac- providing water services, the government's objective of tive returns in either the short or the long term. Such universal access to potable water and sanitation facilities disincentivesdiscourage even government-supported credit will be an unattainable dream. The major objective of the facilities such as HUDCO and the Life Insurance Corpora- strategy, therefore, is to achieve full cost recovery of op- tion of India which, despite mandates to support both in- erations, maintenance, replacement and capital costs in frastructure and rural development, invest only a minor the long term. In cases where funds are borrowed to fi- proportion of their total portfolio in RWSS. The key to mo- nance the investments, the annual interest payments bilizing market financing or inducing corporate interest in would also be recovered from users. RWSS investments will be reforms to enable cost-reflective xviii pricing of services, plus the associated reforms discussed the National Water Policy that explicitly assigns drinking abrwe to achievea commercialiseddemand-orientedculture water priority over other uses is an important first step that in RWSS entities to tailor operations to the needs of user most states have yet to take. Adoption of effective legisla- communities,and structure investments according not only tion and mechanisms to regulate and manage groundwater to community needs but also to their abilities to pay. In ad- use and thus ensure a basic supply of rural (and urban) dition to user involvement in all sectoraldecision making, it drinking water is a key associated need. These issues neces- willbe important to strengthen corporate financial manage- sarily require a multi-sectoral and broader resources man- ment capabilitiesin the water agenciesto instillfinancialdis- agement perspective than is covered in this paper, which cipline and effective handling of cost and pricing issues. focuseson RWSSservicedelivery. Broader resourcemanage- Full recurrent cost recovery and an annual contribu- ment issues are assessed in greater depth in the reports on tion to a replacement fund are generally affordable for the "IntersectoralWaterAllocation,PlanningandManagement," vast majority of the rural population. If the i'Vorld Bank's and "Groundwater Regulation and Management,"also pre- guideline of 3 percent of household income is used to de- pared as part of the Government of India-7Norld Bank Wa- termine affordability, cost recovery for basicWSS technol- ter ResourcesManagementSector Review (1998aand 1998b, ogy alternatives is generally affordable by over 80 percent respectively) (subsequently published 1999). of the rural population. In situations where the cost bur- den (i.e., the capital cost share and full cost of operations, Plan ofAction maintenanceand replacement) for communitiesof the least The strategy recommends a number of critical actions to be expensive feasible technology generally exceeds a taken by the central as well as the state governments. Table I community's ability to pay out of incomes, then payment below summarizes the key reform actions. A detailed Ma- in-kind, user accessto credit facilities, or a direct and trans- trix of Recommendations is presented in 'Table 4.6, listing parent subsidy arrangement could be implemented. Where agencies responsible and proposed time firame for action. wide disparities exist between socio-economic groups of These recommendations are already the subject of encour- consumers, cross-subsidization may be an appropriate and aging follow-up by the Government of India, a number of practical option. Aprogressive tariff with different pricing states, bilateral and multilateral agencies, and NGOs. Sub- tiers for different uses and different classes of customers sequent to initialdiscussioncum dissemination at a national can be considered at various administrative levels (i.e. the workshop' in February 1997 of an earlier draft of this re- gram panchayat, district, or state) as appropriate. Such a port, and report revisionsto incorporate the outcome of the tariff structure if well-designed, could support cross-sub- national workshop, further workshops at rtegionaland state sidization from one region to another, from urban to rural are being organized by the RajivGandhi National Drinking areas, from one class of user to another, or from high to Water Mission to disseminate the final strategy recommen- low consumption. dationsas reflected in this report. The recoinmendations are also being incorporated at project level in somestates,in the ProtectionofWater Sources design of projectssupported bythe WorldBank,and in vari- Safeguarding the availability and quality of rural drinking ous bilateral agencyand NGO-supported activities. There is water in India is also a priority need, for without appropri- now a need to broaden implementation to a formal national ate mechanisms now to give rural drinking water effective strategythat encompassesallelementsof the report in a com- priority over other uses and protect groundwater sources prehensive approach. This sector reform process is under from excessiveabstraction and contamination, the situation energetic initiation by the Government of India and merits will deteriorate furtherand the costs of providinggood qual- full support to achieve the intended turnaround in sector ity drinking water will continue to escalate. Implementing performance,' 'The national workshop on RWSS,held on February 20-21, 1997, was chaired by the Rajiv Gandhi National Drinking Water Mission. Proceedings of the workshop, including speech delivered by the Rural Development Secretary, Mr. Vinay Shankar, are reproduced in the Annex 1. Table I.Recommended Plan ofAction -Summary A. Establishan EnablingEnvironment 0bjective:To ensure apolitically,legally and institutionally supportive environment that will facilitatethe implementation of the reform process with particular emphasis on devolution of responsibilitiesto grass-roots levels and, in particular, user implementation, a demand- oriented approach, full cost recovery and financial sustainability (refer Sections B & C below). A.I. Public Awareness. lmplement a widespread public awareness campaign to promote water as an economic good and the need to charge cost-reflective prices and implement conservation activities. A.Z. Give Priority to DrinkingWaterinWater ResourceUse.Strengthen and implement national and state policies giving priority to drinking water, and prepare state specific legislationto protect groundwater resources. A.3. Redefineand Reduce Gdvernment Role. Developand implement national and state RWSS policies definingthe role of public sector in the RWSS sector,and guidelinesfor sector operations regarding financial and institutional aspects. A.4. Full Cost Recovery aqdCapital Cost Sharing. Developand implement national and state RWSS cost recovery and cost- sharingpolicy that defines situdtionsin which the community will be eligible for matchinggovernment financing for new schemes and rehabilitation or replacement of existing schemes. A.5. Decentralize Responsiblities. Devolvemanagement autonomyto locallevel administrations. A.6. Institutional Strengthening.Strengtheninstitutional capabilities,includingdevelopmentof MIS, financial systems,monitoringand evaluation systems, and training at all administrative levels to facilitate the devolution process. B. Ensure InstitutionalSustainability Objective: Decentralizeand strengthenRWSS agencies, definingclear mandates at each administrative level, devolvingfunctions to the lowest appropriate level, and encouragingparticipation of NGOs & the private sector. B.I. EnablePanchayatinstitutions and user community groups to assumethe lead in decis~onmakingfor RWSS. B.Z. Enable, promote and facilitate participation of NGOs and the private sector; define appropriate roles of these non-governmentas well as external agencies. B.3. Strengtheninstitutional capabilities to undertake consumer orientation, policy development,planning,implementation,O&M, monitoring and evaluation,and promotion of health and sanitation. B.4. Restructure public sector institutions. B.5. Strengthenoperational guidelinesand proceduresfor RWSS agencies. C. Ensure Financialviabilityand Sustainability Objective: lmplement full cost recovery of operationsand maintenanceand replacementcosts to ensure sustainability of sector investment lmplement a cost-sharingapproach ensuringthat the panchayat raj institutions and community are partners to make capital investmentmore efficient and transfer ownership. Encourage sector financingby rural credit facilitiesand private sector investors. C. I. lmplement a demand-drivenapproach. C.Z. Increaseuser charges to recover O&M costs. C.3. Reduce O&MCosts. C.4. Introduce and implement capital cost sharingpolicy. C.5. Make RWSS agenciesfinancially self-sufficientand strengthentheir capabilitiesin financialmanagement. C.6. Re-prioritize Public Expendituresin RWSS. C.7. lmplement effectiveaccountingand auditingprocedures, billing and collection systems, standardfinancial reporting formats, and simple but well-defined financialmanagement and accountingsystems. C.8. Amend existing legislationand regulationsso that panchayat raj institutions and villagewater supply and sanitationcommittees are legally entitled to enter into financingand loan agreements with government-sponsoredrural credit facilities or private sector financial institutions. C.9. Establish a system for providing loan guarantees by the block and district panchayatraj institutions or the state, as necessary. Table I.(cont.) Recommended Plan ofAction -Summary D.ProtectWater Resources Objective: Implement measures to assure priority usage of water resourcesto drinking water and to protect quality and sustainability of groundwater resources. D.I.Define appropriateremedialmeasuresto addresswater quality problems. D.2. Designa strategyfor developingwater supply schemes in areas with water quality problems that meet safe drinking water requirements and acceptability(preference) of users. D.3. Develop technology and other innovative options for solvingwater quality problems (fluoride, iron and arsenic) bodhat villageand household level as well as for larger piped schemes. D.4. Dwelop groundwater legislationand regulations,and develop regulators' capabilitiesto manage and protect groundwater resources. D.5. Develop institutional capabilitiesfor multi-sectoral water allocation,planningand managernent,includingwater pricingmechanisms. and features to prioritize allocation for drinking water and protectionlmitigation againstpollution (refer GOI-World Bank, 1998). Sector Development and Evolution of policy framework ater supply and sanitation were added to the national agenda during the first five- year planning period (1951-56). In 1954, the first national water supply and sanita- tion program was launched as part of the government's health plan. Central and state administrations provided equal funding mainly for rural piped water supply schemes, with limited provision for point sources such as wells and boreholes. Rural schemes were gener- ally provided to population units of less than 5,000. During the initial years, the program real- ized only limited achievements, mainly because states lacked qualified staff to plan and execute projects, and materials were in short supply (Ghosh et. al., 1995). During each of the three subsequent five-year plans, ducing: (i) water resource management and according do- funding was allocated for the development and strengthen- mesticwater supplylrhehighest priority; (ii) design standards ing of state public health engineering departments. In rec- for groundwater strilcturesto protect groundwater sources; ognition of the progress made, states were granted financial (iii) water quality monitoring and mapping; and (iv) data authority in 1968 to sanction rural water supply schemes management and evaluation. (subject to defined limits). During this fifteen-year period, The national policy guiding the rural water supply and the program sought to support local community develop- sanitatioh (RWSS) sector today is contained in the Eighth ment and improve the welfare of backward classes. Rural Five-Year Plan (1992-97), which states: "Safe drinking wa- water supply schemeswere expanded to include small towns ter supply and basic sanitation are vital human needs for with populations less than 20,000, and priority was given to health and efficiency [given that] death and disease, par- problem villages, where the scarcity of drinking water was ticularly of children, . . and the drudgery of women are . deemed particularly severe. directly attributable to the lack of these essentials." High The Ministry of Water Resources drafted a National priority was given to serving villages that did not have ad- Water Policy in 1987 to guide the planning and development equate sources of safe water (defined as more than 10 li- of water resources throughout the country. This policy in- ters per capita per day-lpcd) and to improving the level of cluded a number of recommendations, which were subse- service for villages classified as only partially covered (10- quently issued by various state secretaries. These 40 lpcd). New guidelines for sanitation issued in June1993 recommendations generally focused on the need for intro- allowed a broad range of technology (direct and indirect 'This report is one of five reports undertaken jointly by the Government of India and the World Bank,under the India -Water Resources Management sector review pro- gram.Theotherfour reportscover: (i)the irrigationsector, (ii)the urban watersupplyand sanitationsector,(iii)groundwaterregulationand management,and (iv)intersectoral allocation, planning and management. A consolidated reportcoveringthese five subject areas of the water sectorhas also been prepared. Box I.I.MaharashtraGroundwaterAct I The MaharashtraGroundwater Act was developed in 1993 but was not officially endorsed and implementeduntil November 1995. The Act seeks to regulate groundwater exploitation to protect public sources of drinking water.The Act comprises:(i)regulations t o register all public drinkingwater sources in avillage; (ii) regulationsandguidelinesto apply for permissionto sink a well, including measures to protect public sources of drinking water (and an area 500 meters from drinking water sources); (iii) regulations to declare water scarce areas and over-exploitedwatersheds, includingmeasures to protect public sources of drinking water within such areas (through control of withdrawal from existing wells); and (iv) procedures to verify applications for new wells in over- exploited watersheds. The development and implementationof theAct provides an initial legislative framework for protecting groundwater sources in MaharashtmThe ACShowever, does not address comprehensivemanagement needs.Although it does not preclude integrated water management, the Act neither promotes itWater-logging, water quality, water pollution, end-use efficiency,allocation and environmentalconsiderations,represent equallyimportant challengesthat will haveto be addressed in thenext revisionof theAct. single-pit, double-pit, and VIP latrines) and abolished the (Gujarat, Kerala,Maharashtra, Orissa and Tamil Nadu) have provision of subsidies to households above the poverty line. formulated their own water policies.Other states, in particu- Households below the poverty line would continue to re- lar Andhra Pradesh and Rajasthan,are in the process of pre- ceive a subsidy of 80 percent. paring their state water policies.Although a national or state The Eighth Five-Year Plan also identified several points water policywould be an important first step, the states will of emphasis, these being that: (i) water should be managed also need enabling legislation to facilitate implementation as a commodity in the same manner as any other resource; of the policy. One key piece of legislation would be for the (ii)the deliveryof waterservices should be based on the prin- regulation and management of groundwater resources (Box cipleof effectivedemand and should correspond to the stan- 1.1 summarizes by way of example,Maharashtra's Ground- dard of service that users are willing to maintain, operate water Regulation Act). Legislation on its own without the and finance; (iii)local bodies (i.e., the panchayat rajinstitu- concurrence of the user communities, however,will not be tions) should be responsible for operating and maintaining effective (GOI-World Bank, 1998b). The several existing the system installed; (iv) local bodies should be free to levy piecesof groundwater legislationin India, for instance, have and raise appropriate user charges for drinking water and had limited if any impact due to lack of acceptanceby users. sanitation services, undertaking operations and maintenance The passage of similar legislation by other states has met if not further investment, and be self-sustaining;(v)the pri- strong resistancefrom users. By contrast,the recent approach vate sector should be encouraged to construct and maintain taken byWest Bengal to involve user communities incremen- schemesto the maximum extent feasible;and (vi)appropri- tallyin regulation and management on a pilot basis, has led ate links should be forged between water supply and envi- to greater understanding and acceptance by usersof the need ronmental sanitation. for such regulatory measures to ensure sustainability of re- These points address the challenges that have emerged sources.With such piloting and revised approaches now rec- in the sector. Moreover, the Eighth Five-Year Plan specifi- ommended by GOI-World Bank (1998b), the passage and cally emphasized the desirability of adopting an integrated adoption of groundwater legislation will now be easier. approach to planning and implementation, which entailed the provision of primaryhealth care, potable water,women's Sector developments,achievementsand welfare,immunization and sanitation facilities,all in collabo- issues ration with local administrations and user communities. Technical support needs of local administrations and user Programs communities were to be providedby district administrations. Historically, most rural drinking water in India has been Along with the National Water Policy and the recom- supplied outside the government's sphere of influence or mendations of the Eighth Five-Year Plan several states responsibility. Community-managed open wells and private wells, tanks, ponds and small-scale irrigation res- states with technical and scientific ass:istance.The National ervoirs, have been and continue to be the main source of Technology Mission was renamed the Rajiv Gandhi Na- rural drinking water. The first government-installed wells tional Drinking Water Mission in 1991, and was charged appeared in the 1950s as part of a policy to meet basic needs with covering in the most cost-effec:tivemanner, the re- for drinking water. Since then, public service has increased, maining not-covered villages before the end of the Eighth and the involvement of users and communities in rural Five-Year Plan. The Rajiv Gandhi Mission sought to develop water supply has decreased. The central government has replicable models for rural water supply through 55 inten- played an important role in setting standards and provid- sive area-based projects (or mini missions) and five pro- ing funds and technical assistance for the sector. In 1972- grams (or sub-missions). These programs tackled quality 73, the Accelerated Rural WaterSupply Program (ARWSP) problems of excessive fluoride, iron, and brackishness and was initiated by the center to channel funds directly to the infestations of guinea worms, and promoted the conserva- states. The purpose of the ARWSP was to provide water to tion of water and recharge of aquifers. The 55 mini mis- problem villages inhabited by tribal peoples, harijans and sions were concluded in early 1994, but some of the other so-called backward classes. Subsequently, the 20- sub-missions, notably those experimenting with the appli- Point Minimum Needs Programme was established in 1975 cation of technology, are still ongoing. to replace the ARWSP and give highest priority to prob- lem villages. Coverage The central government reintrodpced the ARWSP in According to the Rajiv Gandhi Mission,access to public wa- 1977-78, this time with funds provided by state administra- ter supply by 1995 had been provided to 75 percent of the tions through the Minimum Needs Programme. These two rural population (520million people) since the first national programs sought to ensure that all rural areas received a water supply program was launched in 1954 (World Bank, minimum provision of safe drinking water. National norms 1996a).From 1954-55 through 1984-85 an additional 8.5 were established defining the basic water requirement as 40 million persons in rural areas were served each year. litres per capita per day (lpcd), with certain criteria for dis- Increased investment during the International Drink- tance and number of persons per installation. Safe drinking ing Water and Sanitation Decade,coupled with a change to water was defined as being free from biological and chemi- hand pumps fitted on tubewells and borewells,dramatically calcontamination.These norms continue to guide both pro- increased total coverage.During 1985-86 through 1994-95, grams today, by determining the selection of villages or an additional 22.4 million persons in rural areas were sup- habitations that are eligible for government funds.With the plied with water each year, resulting in a decadal increaseof Sixth Five-Year Plan (which coincided with the beginning 264 percent (Figure 1.1). These figures were estimated as- of the International Drinking Water and Sanitation Decade suming"equivalentfull coverage."The reality was that while in 1980),India deepened its commitment to rural watersup- 95 percent of the rural population had accessto a safe source ply andsanitation. Prior to 1985,both rural and urban WSS of water in 1994,onlyk2 percent were fully covered (i.e. that were handled by the Central Public Healthand Environmen- they received 40 lpcd or more) and 413 percent were partially tal Engineering Organisation in the Ministry of Urban Af- covered (receivingbetween 10 and 40 lpcd). Only 5 percent fairs and Employment, which provided state governments of the rural population had no access to publicly supplied with technical support and advice. Thereafter, responsibil- water or received less than 10lpcd. ity for rural water supply and sanitation becamethe respon- Although useful, national coverage rates mask signifi- sibilityof the Department of Rural Development under the cant regional variations. Eleven of the 25 states and seven Ministry of Agriculture. union territories each have rural populations that exceed 25 The Central RuralSanitation Programme was launched million, and the rural populations in six states approach or in 1986, with matching funding provided through the exceed 50 million (1991 census, Table 1.I).Service coverage state's Minimum Needs Programme, and the National Tech- rates vary widelyfrom state to state, with full coverage rang- nology Mission was established within the Department of ing from 7 percent in Kerala to 78 percent in Bihar. Partial Rural Development with the express purpose of providing coverage ranges from 3 percent in I'unjab to 85 percent in - i 5 agure 8 . 1 . RuralWater Supply Coveragein India, 1960-95 ,*b% ..,..A.. .....ia:II. The percentage of the rural population that is Social Sciences, 1996). Current coverage-driven strategles , ,L-12i..pietelyunserved is as high as 39 percent in Punjab and with subsidies for rural latrines have shown poor results. (.q-lbi to or less than rhe national zverage of 5 percent, in 14 The provision of alternative delivery systems must be ex- .... -:,:.;,:.. djld of ullion territories. plored, and in this context UNICEF's rural sanitary mart An impressive -.umber of installations have been approach holds promise (see Box 1.2). The private sec- .:ci?.srructed. According to the Rajiv Gandhi Mission, tor, with NGO assistance, could undertake all aspects of '> : L . rniliion hand pumps have been installed on drilled ~ rural sanitation delivery. If necessary, central or state ~~rbewellsand boreweiis, and 116,000 mini and regional funds could be used to provide incentives or directly sup- piped schemes have been constructed. Mini and regional port their participation. piped schemes supply 1.5 rnillior, standposts and 4.3 mil- lion house connections. Installed piped water schemes Water Quality and Health rmge from technically simple mini-piped systems (that Water quality issues are gaining recognition as groundwater pllrnp water from a nearbysource of groundwater to a small depletion worsens. The level of natural contaminants such hoiciing tank serving individual houses with public taps) as fluoride and arsenic, and chemical pollutants such as pes- to technically complex large regional schemes (that treat ticides and insecticides, is high and rising. The lack of reli- ar:d pump water to several villages from a distant source able data, however, makes it difficult to appreciate the of surface water). In 1996 approximately 75 percent of the magnitude and impact of the problem. pspulation receiving public water were served by hand The GO1 (1994b) Validation Survey reports that pump technology, while 25 percent were served by piped 142,000 habitations (70 million persons, assuming an av- tvarer schemes (GQI, 1996). erage habitation of 500 persons) consume water that has Efforts to increase sanitation coverage have been less excessive quantities of fluoride, iron, nitrate, arsenic and successful. The Eighth Five-Year Plan sought to cover 5 salinity. Unfortunately these results may not be fully reli- percent of the rural population with sanitation services able. In the case of one contaminant for instance, fluoride, by the end of the period, but even this modest target was its presence in groundwater was reported confirmed by not achieved. By 1996, less than 4 percent of the rural standard laboratory tests, even though fluoride cannot be population was covered by sanitation services (Indian identified by sight or taste. The findings of the GO1 (1997) - . , Assam 3,325,6133 8 4.23 5 7,- -.? ' 5 ,, ; 2, ,,/a/ ...., ,'id> ..I . . ,b t-, .-. ,-,..., . .. Bihar 2.328,623 3.12 8 :,4+ 4 v 5 ~ ~i 8.2t . -.,..,..-" ...'k: ~, , <_,,- .., : ~,.>.. li ,. --. .,.. Goa 35,640 5.00 402,ti I4 56.5: .!i - LI" r:t .. .jc.:.J.. I $.-;..I.: Keraia 2.240.255 1 7.61 9.6 li.820 75 7; 54 3; c 2 ..z7,dPc i )Madhya Pradesh 2,756,294 5.3 1 24,069,536 46.d 1%,445,31 i 48 ,, - !4+ L ,L!>, 1 Maharashrra 405.984 0.83 15,887,954 32.29 32.9 14,024 66 89 -59 207.762 i I Man~pur 87.8 19 6.65 901,124 68.28 3s3,EO; -,q Ib, b i19,744 Meghalaya 211,518 14.78 424,804 29.68 794.92 1 55.>7 1,4231,243 g Nagaland Orissa Punjab Rajasthan Sikkm Tamil Nadu Tripura UttarPndesh West Bengal Andarnanand Nicobar D and N Haveli Damarnand Diu Delhi Lakshadweep Pondicherry Total -Notavailable. Source: GO!. 1994b. Ground Water Sub-Group likely provide a more accurate programs have included thiscomponent. Integration of these picture of the problems affecting the quality of groundwa- programsis a must. ter, this being that: (i) arsenic affectsdrinking water in West Bengal (estimated at 1,000 habitations or 500,000 persons); User Satisfaction (ii) fluoride levels are high in Andhra Pradesh, Gujarat, Studies to determine whether consumers are satisfied with Haryana, Karnataka, Punjab, Rajasthan, Tamil Nadu, and existingpublicRWSS servicesare rarelyconducted.Although Utter Pradesh (affecting 28,000 habitations or 14 million some donor-assisted programs have conducted utilization persons); (iii) iron levels are high in the northeastern and and functionality studies, these focus mainly on the knowl- eastern parts of the country (affecting 58,000 habitations edge, attitudes and practices of users rather than their satis- or 29 million persons); and (iv) salinity is high in Gujarat, faction with existing services. Indirectly,these studies show Haryana, Karnataka, Puniab, Rajasthan, and Tamil Nadu. that severalvariablesaffect user satisfaction with government Water quality concerns clearly have serious implica- provided services in rural areas: distance to and ease of ac- tions for the supply of rural drinking water and are im- cess to services, quality and reliabilityof alternative sources, portant determinants of public health. Although several hours of service, and time between repairs. Users who are studies and pilot programs (sponsored by both the govern- satisfied with government provided water do not necessar- ment and various external funding agencies)are under way, ily use it for drinking and cooking if alternative traditional proposed solutions have had mixed success. Technologies sources are easily accessible and more convenient. As iron developed and tested to remove fluoride and iron have and salinity levels rise, for instance, the use of public water shown satisfactory results in a laboratory environment. The for drinking and cooking decreases proportionally, subject complexity,high cost and inconvenience of these technolo- again to the availabilityof alternative sources. gies, however, have constrained their implementation and User satisfactionwith sanitation facilitiesor displeasure sustainability. In general, government-financed rural sani- at the lack of facilities,are typicallycorrelated with demand tation programs have been poorly integrated in rural wa- for household latrines. The latter depends on population ter supply programs, despite the stated policy. At the field density,accessto open space,and cultural and social factors. level, rural water supply programs are not integrated with Where access to sanitation is accompanied by intensive in- sanitation, nor are they integrated or coordinated with pri- formation and healtheducation campaigns,one usuallyfinds mary health care or education programs. The basic-needs that demand for sanitation facilities, use rates and also sat- approach, which spreads resources thinly to achieve cover- isfactionare generally high, at around 80-90 percent.Where age for all rather than quality and adequate water for some, support for such campaigns is lacking, use rates can be as should be reviewed because it may not optimize the po- low as 10percent.One can infer that demand and hence user tential health benefits that could be achieved by reducing satisfaction for sanitation facilities in India is very limited, waterborne or water-related diseases. given the abysmallylow coverage rates. From a public health perspectiveIndia is in a transition phase. Some successes have been achieved, such as the no- Protection ofWater Sources table achievement of eradicating guinea worm, mainly Drinking water for rural households is facing increasing through a program that protectedopen dug wells. Other risks competition.Approximately90 percentof India's rural popu- associated with bacteriologicalcontamination and epidem- lation rely on shallow or deep groundwater aquifers for ics, though decreasing, are still relatively high. In addition, drinking water. Whereas domestic use accounts for only 5 new risks are emerging from the rise in wastewater produc- percentof total groundwater abstraction, irrigation accounts tion (and its inappropriate or inadequate disposal) that ac- for almost 90 percent and industry for the remainder. The companies the increased coverage and service levels. recent expansion and development of the agricultural sec- Environmentalsanitation is essentialfor minimizingthe vec- tor have swelled the demand for groundwater-based irriga- tor-borne diseases that thrive in stagnant waters. India's tion. Groundwater currently provides half of the water used RWSS programs in general have neglected environmental for irrigation and is abstracted from more than 15 million sanitation until recently, although many donor-assisted wells. Between 1951 and 1993, the estimatedagricultural area served by groundwater irrigation expanded from 6.5 million areas; (ii) promote local participation; ~(iii)operate at low to 35.4 million hectares, an average annual increase of al- costs;and (iv)adapt and be innovative when needed (Cernea, most 13 percent. 1988). The initial involvement of NGOs in the sector came The rapid development of irrigation is depleting in the sixties with the famines in Bihar (1964) and groundwater resources,resulting in the need to replace dried Maharashtra (1969),when several NGOs (Action for Food up sources of drinking water.While in the aggregate only an Production (AFPRO), A'ction for Ag~iculturalRenewal estimated 30 to 35 percent of the potential groundwater re- (AFARM),and others) were formed to provide technicalser- sources are being exploited, increasingly more areas at re- vices for compressed air-driven drilling for hand pumps. In gional and local levels are facing a scarcity of groundwater this early period, NGOs functioned as (drillingcontractors for domestic uses. In 144 districts in 10 states, groundwater to state governments and donor-financed programs. The ef- is declining because the rate of withdrawal exceeds the an- forts of these NGOs convinced the donlor community and nual recharge (Aims Research, 1996). Government agricul- the government to invest in hand pump programsfor drink- tural subsidies exacerbate the situation by encouraging ing water,especiallyin the chronically drought-prone areas greater withdrawals than otherwise. Highly subsidized elec- of the country. NGOs like Swissteco and ELC Water Devel- tricity tariffsand favorableinvestment terms offered for well opment Project, introduced new drilling technologies and construction have led to an indiscriminate and dispropor- integrated drilling activities with geophysical site investiga- tionate abstraction of groundwater for irrigation. Without a tions, yield testing, water quality testing and data banking. change in government policyand intervention,the situation The majority of NGOs contracted by the government is likely to deteriorate even further. come under the umbrella of the Council for Advancement In Haryana and Punjab, irrigation absorbs almost all'of of People's Action and RuralTechnology(CAPART),becadse the potential groundwater, and exploitation rates are also government financial regulations generally preclude direct high in Gujarat, Karnataka, Maharashtra, Rajasthan, Tamil contracting of NGOs. CAPART has had mixed experience Nadu, and Uttar Pradesh. The Central Ground Water Board with NGOs. On the positive side, NGOs have been able to classified 6 percent of all administrative blocks as "dark" in penetrate remote areas, negotiate more favorable drilling 1995, meaning that groundwater abstraction exceeds85 per- prices (becausethey are not encumbered bygovernment pro- cent of total annual recharge. This is an increase of 34 per- cedures),select siteswithout succumbing to local pressures, cent over the 1991 estimate of 4.5 percent, or an annual mobilize users and raise contributions (Daw,1996). On the average of 6.8 percent. Using these estimates as a rough ap- less positive side, most NGOs have been small-time contrac- proximation of the affected population, as many as 37 mil- tors with no interest in working with people. Manyhave had lion people were affected in 1995, an increase of 2.6 million little technical or management capacity and have used sub- persons each year since 1991. In 1994,the Rajiv Gandhi Mis- standard materials, and in 1995 CAPAIiTblack-listed more sion found that a seasonalor permanent fallin the water table than 500 NGOs for substandard work and financial irregu- was evident in one-third of the habitations surveyed. This larities. clearly has serious social, financial and institutional impli- Today, NGOs are involved in rural water supply activi- cations for the rural supply of drinking water, especially ties in several states to varying degrees depending on their where alternative supplies require a more complex and ex- presence. Punjab has very few NGOs, whereas Maharashtra, pensive technology. Rajasthan, and Uttar Pradesh have a proliferation of NGOs, mostly in production-related fields. The most successful in- Contributions of agencies outside government volvement is within donor-assisted projects where the insti- tutional context is conducive,such as theWorld Bankfunded Non-Governmental Organizations project in Karnataka.The recentlycommenced World Bank- NGOs have played a significant role in the RWSS sector in assisted Uttar Pradesh RWSS project, which has major NGO India over the past three decades.They have exhibited com- and user involvementaspects,is alsoworth watching. In these parative advantages that other organizations lack. These in- projects, NGOs have been used mostly as an intermediary clude the capacity to: (i) reach the rural poor and remote between the community and the water agency, facilitating project activities related to community mobilization, cost the project management unit but has no direct role in sharing,health education, and other non-technicalactivities. service delivery. Services are delivered by support orga- Other noteworthy activitiesare in the area of watershed de- nizations (NGOs, community-based organizations and velopiaent. @hereNGOs have taken a holistic approach to the private sector) working iri partnership with commu- water'ress~rcesdevelopment in areas as far-flung as the nities. This project though shbwing initial promise, is just Gangtic delta .ofWest Bengal and the Himalayan foothills. beginning, and assessing the efficacy of the approach Out of a desire to develop water resources, a large number would be premature. However, such an approach could of NGOs founded the National Association for Water Re- succeed if the project management unit supports partici- sources Development Agencies (NAWDA)in 1982. patory projects and collaborative decision-making, and if The Sholapur hand pump was developed by an NGO p'articipating NGOs have the capacity and interest and later improvedto become the India Mark I1hand pump, to deliver services, plus a willingness to meet the one of the best,cheapest,and certainlyone of the most com- funding agency's requirements (for an example of how to monlyinstalled hand pumps in the world (Daw,1996).When assess NGOs on a sectoral or sub-sectoral basis, see World large-scale manufacture of the India Mark I1 was contem- Bank, 1996b). plated, NGOs moved away from the manufacture of hand NGOs can provide an alternative to the public provi- pumps and concentrated instead on maintenance. Subse- sion of services,freeing government agenci~sto concentrate quently, NGOs in Orissa, Rajasthan, and elsewhere estab- on activities that they can and should do, such as formu- lished one-, two-, and three-tier maintenance arrangements, lating water policy,defining cost recoverymechanisms and aimed at decentralizing maintenance capability. NGOs par- establishing water quality standards. NGOs, however, may ticipated in the formation of user groups and the provision not always be able to undertake these new roles even if the of training to village artisans. Today, 29 independent hand public sector agrees to allow them to operate. Recommen- pump maintenance projects with the active involvement of dations for greater NGO involvement have therefore to be NGOs are supported by UNICEF. made with circumspection, realism and based on local Recently,state governments have been turning to NGOs NGO capabilities. for assistance in sanitation delivery. Central and state sani- tation strategies explicitly call for NGO involvement in ef- The Private Sector forts to create awarenessand demand and to promote health Private initiatives continue to drive the construction and and hygiene. However, with the exception of a few success maintenance of traditional open wells and household la- stories, as in Gujarat and West Bengal (in Safai Vidyalay, trines. Nationwide, the number of privatelyconstructed la- Ahmedabad, and in Midnapur, under the Ramakrishnamis- trines is almost twice the number constructed through sion), most sanitation programs have met with little success. government programs. The private sector is involved in the The relations between governments and NGOs need supply of materials and construction and, to a very minor closer review. By and large, NGOs are reluctant to work in extent, maintenance. Private consulting firms (and NGOs) government schemes, considering government procedures are alsoengaged on a verylimited basis bystate sector agen- too cumbersome. These same reservations extend to cies. Although operations are performed almost exclusively panchayat raj institutions, which NGOs consider to be in- by government agencies, private sector involvementin con- flexible adjuncts to state governments. The most common struction under government contracts constitutes a substan- problem is that the very qualities that make NGOs attrac- tialpart of capital investments. Procurement of materialsand tive to donors-their capacity to organize and work with construction services from private firms amounts to more people-delaydisbursement and project delivery.As a result, than two-thirds of annual investment in the sector. many donors are exploring possibilities for allocating only Borewell drilling and hand pump installation have the responsibility for hardware (i.e. technical and construc- been dominated by state water agencies. However, the pri- tion activities)to NGOs.In the Uttar Pradesh RWSS project vate sector has been involved in groundwater development, funded by the World Bank, for instance, the government and a huge network of private drilling contractors has been agencyretains a supervisory and disbursement role through meeting the large demand for irrigation tubewells. Qualified private drilling contractors should be more in- regulatory framework, policy making, overall sector i;':.r: volved in the future, and the government should focus on ning, and monitoring and evaluation. groundwater investigations and on monitoring the quan- tity and quality of water. ExternalDevelopmentAgencies The private sector's involvement in operations and Several external multilateral and bilateral agencies prclvi .ir maintenance isstill very limited. Maintenance of installations assistance to the RWSS sector in India. The princil:;.! is considered a government responsibility and generally is external support agencies include the bilateral agencies c:f financed from central and state government allocations. Pre- the Netherlands, Denmark, Germany (KfW), and the ventive maintenance has been neglected, and repairs have United Kingdom (Dept. for Int'l Development, former!:; ;A: been carried out by government agencies. Local private con- Overseas Development Agency ) and multilaterals such a; tractors are a viable alternative to the public agencies and the World Bank, UNDP, UNICEF and the European U ~ i o n . already have a presence in rural areas. Local private mechan- External donor assistance accelerated at the beginning i?! ics for instance, provide maintainance and repair services for the International Drinking Water and Sanitation Decz?::; farmers' irrigation tubewells. In line with the transfer of re- and during that period donor assistance accounted for ai- sponsibility and ownership of schemes to local administra- most 6 percent of total sector investment. Today deve1:)~- tions and user communities, gram panchayats and village ment assistance constitutes only half that level. water supply committees must be strengthened so that they According to information from the Rajiv Gandhi ,i can request and select maintenance and repair services as tional Drinking Water Mission (GOI, 1994a) 12 states -: needed, either from government agencies or from locally receiveddonor support, with loans from the World Banl: 39- - , qualified private contractors. KfW constituting more than half of all financial assist:?n3;e For regional schemes, operations, maintenance and to the sector. Approximately 75 percent of the external 5- management are typically undertaken by state agencies, nancial resources have been allocated to projectsor progr::n-:: though operations and maintenance are not their primary in four of th'e 12 states receiving assistance: Karnaizic.;., responsibility. Thisis reflected in the allocation of both funds Maharashtra, Rajasthan, and Uttar Pradesh. The dew:;- v- and staff. The benefits of proper maintenance are less vis- ment of the assistance provided by the major bilaterai :i-:,< ible and tangible than those of constructing new schemes. multilateral donors is outlined only briefly here. Regional schemes are expected to become more common in The central government has put forward three ccrc-:l- the future and alternatives to the present, often inefficient, erations for donors' regarding their assistance to IF?;,<': system of management should be considered. RWSS sector: (i) rural water supply and sanitation shov!d Although consulting firms have rarely been used, they be considered as part of the social rather than produc;':;. could play a role in RWSS. Relevant skillsand resources from sector, (ii) allocations to the sector should be increased .:? universities, research institutes, and NGOs could supplement (iii) assistance should shift toward national program- : - - or even substitute the current functions of public agencies. cusing on institutional capacity building at all le--I-!- An entry point could be multi-disciplinary fields-manage- (Narayan, 1995). The main role of external support e-::l- ment, community participation, and rural water supply in- cies, however, has been to provide demonstration and e:I tegrated with sanitation and healih education-in which perimentation at the project level. Until now, most agercic;,: government agencies do not have in-house capacity. More have performed this role, with variations in the degr::~.tc investment is also needed in staff training and the supply of which they have followed government policies or experi- spare parts. Instead of building up this capacity in-house, it mented with new approaches. Especially recently, most d<.p- would generally be more cost- and time-effective to utilize nor-assisted projects have emphasized innovative feaA!7r:$ the services of private consultancy firms. Private stakehold- as conditions for lending, such as user participation, c-n.rA ers-contractors, mechanics, masons suppliers and consult- sharing and cost recovery. They have also adopted an - - - r ants-should be encouraged to explore the opportunities for -. grated demand-oriented approach to sector operatio :- participation in RWSS services, enabling government agen- fundamental objective for recent Bank-assisted projeri.. ':, cies to concentrate on strengthening the legislative and instance, is to make local institutions and commn! Box 1.2. Sanitationvillagesand Sanitation Gram Panchayats In Midnapur,West Bengal, the lntegratedSanitation Project is changingthe habits of people from open defecationto use of sanitary latrines (RWSG-SAIUNICEF,IntegratedSanitation Project Midnapur, CASELET 2 DisseminationNotes).Project plannerssoughtto create awareness and then presented a range of technical options from which to choose, enabling people to make informed choices. Subsequent arrangements were made for producing, delivering and installinghardware, and for catering to administrative and accountingrequirements.No subsidies were envisaged or provided, even for the poor. Today, 127 villages and 3 gram panchayats in Midnapur are fully covered with household latrines and declared to be sanitation villages and sanitation gram panchayats.This is a matter of extreme pride for them.An anecdotal report indicates that parents would prefer to give their daughters in marriage to such villages. responsible for water supply and environmental sanitation a network of private production centers and retail outlets by adopting an integrated demand-oriented approach with for sanitation products, coupled with publicity and social community participation, capital cost sharing and cost re- marketing (see Box 1.2). The strategy is a first step in the covery as basic components. shift away from a subsidized government program. The ap- UNICEF has been active in India since the late 1950s proach is to have the private sector create retail marketing and, with field staff in 10 states, has the most staff involved outlets that offer a wide range of sanitation products, includ- in the RWSS sector. In the past, UNICEF provided drilling ing a package for the promotion of personal hygiene prac- rigs and hardware for the extensive hand pump programs. tices. The Midnapur project is based on the following key It now focuses on community development activities. To- underlying assumptions: (i)resources for construction have day, UNICEF plays & major role in advocating policy. devel- - . - - to come from the usersthemselves;(ii)theemphasis is placed opment and reform, and serves as an intermediary between on advocacyto create demand for services; (iii)a focal point NGOs and the central and state governments. It also sup- per village to serve as a responsive repository of informa- ports a broad range of pilot activitiesthat serve major dem- tion and liaison; and (iv) substantial resources are to be in- onstration objectives. UNICEF's comparative advantages vested in training. Both technical and organizational or include its long presence in India and the continuity of its motivational training were envisaged, focusing on orienta- program. tion training for youth clubs, panchayat members and vil- UNICEFsupports one of the most sustainable alternate lage leaders. Training was also provided to village masons, delivery systems for sanitation. In West Bengal, the drilling mistries, and women caretakers of hand pumps (see "Midnapur Model"has established rural sanitary marts- Box 1.3). The Midnapur case demonstrates that with skilled masons (Kurt et. al., 1996).When the rural sanitation program in Kerala began with assistancefrom Danida and the Dutch, the lack of local masons slowed the pace of the program. Unskilled rural women from two panchayats were selected to learn masonry.Trainingfocused not only on construction but also on financial management and cooperative work.The women pro- ceeded to prove their capability in makingcement bricks, constructingdouble-pit latrines, and generally extendingtheir expertise into buildingconstruction. In 1994, women masons constructedmore than 1,000 latrines and produced more tMn 25,000 bricks. In the words of a 40- year-oldparticipant of the program,"l was very punled and reluctant, and doubted the ability of the women when I first saw them. Once the work was over and found to be really well done, I breathed with ease. Nowadays when the women masons visit any SECTORDEVELOPMENT AND ACHIEVEMENTS sufficient promotion, even the poor can finance their own strengthening, with involvementof commurlitiesin all stages latrines.The central government has expressedinterestin this of project implementation (including cost sharing and cost approach, and some states (such as Uttar Pradesh) have al- recovery). ready adopted it. The impact of donor assistance on the policy, strategy The Housing and Urban Development Corporation and approach of the central and state governments is un- (HUDCO),which supports the construction of sanitary la- even. While progress on strategy and approach at the state trines as part of its urban housing program, is proposing to level has been limited, it Is clear that external assistance on set up a network of district intermediate technology centers, project bases and for policy strengthening have influenced to produce construction materials and train masons and the development of the comprehensive policy statements other skilled persons. These will be expanded in time to each presented in the Eighth Five-Year Plan. Other more discrete block. In the context of initial privatesector reluctance,these impacts have been achieved. In Karnataka,,the Danish-as- centers could produce and supply a range of low-cost to sisted RWSS project resulted in a government order enforc- more-expensive options keeping in view the possibility of ing a 250-meter zone to protect wells containing drinking functional upgrades. With assistancefrom UNICEF,various water. UNICEF's development of hand pump technologyand types of latrines costing from Rs. 300 to Rs. 3,600 have been marketing resulted in broad adoption of th~eIndia Mark I1 developed. HUDCO via soft loans, could further assist in hand pump as the national standard. In Kerala, the Dutch setting up private sector or NGO-operated sanitary marts, and Danish-assistedproject developedan effiectiveand work- complete with marketing and publicity. able approach and a detailed methodology for delivering Support from Denmark and the Netherlands to the sanitation. Low-cost sanitation is now a priority in local de- RWSS sector in India date from the early 1970s,initially fo- velopment plans, with 15-20 percent of income earmarked cused mainly on technical support to identify problems and for sanitation. develop solutions on a pilot basis. Since the mid-1980s The experience gained from almost all donor-assisted projects have been directed toward sustainable development projects shows the importance of emphasizing capacity and interventions, with an emphasis on non-technical as- building of stakeholders and other actors in the sector.How- pects such as community involvement, cost recovery,health ever,changingfrom assistancefor individual projectsto long- education and institutional building. Recent pledgesof Dan- term support for institution strengthening has not been ish assistanceto integrated RWSS programs in Karnatakaand firmly established among single donors, with the possible Tamil Nadu, for instance, comprise programs that empha- exceptionof UNICEF. In India, a major constraint is the lim- size both a demand-driven approach and institutional ited financial role-and limited leverage-of donors. Institutional Framework and Sustainability T he institutional structure of RWSS in India is a complex one. It involves many institu- tions at national, state and local levels, often with unclear or overlapping responsibili- ties. Sector institutions are typically overstaffed and underskilled, which hampers them from effectivelycarrying out their responsibilities.Though in a few cases in some states user communities and the private sector are involved to a degree in decision making and implemen- tation, the norm is one of public sector dominance (at higher levels of government, i.e. state and to some extent national rather than local administrations) and the presence of a supply- driven approach. The current institutional arrangements are widely accepted as inadequate to address the needs of user communities; however,only partial reforms have been identified to date to resolve the constraints. Experienceinternationally as well as in pilot projects iin India demonstrate that better coverageof the rural population, and improved quality of service, can be achieved at lower cost through demand-oriented approaches and involvementof user com- munities in sectoraldecision making, financing and implementation. The challenge is to estab- lish the arrangements that will enable such approaches to emerge.These will inevita1)lyentail a devolution of responsibilities to local governments and communities. Role and effectivenessof government its mandate and applying leverage consistent with its finan- agencies cial clout. First, the Rajiv Gandhi Mission has hadl limited influ- National Level ence to ensure consistency of state policies and strategies At national level, the Rajiv Gandhi National Drinking Wa- with the national policy. Regarding for instance, one com- ter Mission (hereafter RajivGandhi Mission or RGNDWM) ponent of the national strategy, Informatiion Education formulates guiding policy, sets standards, and provides Communication (IEC) strategy for undertaking public funds and technical assistance to the states. It allocates awarenesscampaigns, no state has yet implemented an in- funds under the Accelerated Rural Water Supply Program tegrated and participatory system of rural water service (ARWSP) representing about 40 percent of total govern- delivery nor constituted IEC cells within the state water ment financing to the RWSS sector,and supervisesthe Cen- agencies. Because provision of central funds to the states tral Rural Sanitation Programme representing 30 percent is not contingent on adoption of these strategies, target- of total RWSS financing. Despite its prominent roie, the driven norms continue to dictate water suplplyimplemen- Rajiv Gandhi Mission faces several constraints in fulfilling tation, and latrines are constructed without regard to states have separate public health engineering departments and makes recommendations on all watler supply pro- charged with planning, investigation and design. grams and is responsible for providing monitoring and In some states (such as Gujarat, Kerala, Maharashtra technical support to the district engineering divisions that and Tamil Nadu) the WSS Boards have been constituted implement the schemes. The PHED also provides drill- to handle urban and rural water (and one state, Uttar ing services to the district, while the gram panchayats are Pradesh, formed a corporation),following the Third Five- responsible for operations and maintenance. Andhra Year Plan recommendation to form statutory water and Pradesh is the only state in which water supply and sani- sewerage boards. These autonomous bodies were empow- tation is the exclusive responsibility of the Panchayat Raj ered to negotiate loans, investigate and design works, and Engineering Department without technical oversight by supervise construction of works. Though they are sepa- the state-wide body. rate and autonomous entities, the boards are subject to state intervention on cost recovery and personnel man- Local Level agement issues. Financing is overwhelmingly from the Gram panchayatsare the lowest tier in the local administra- state government: for rural schemes, all capital costs and tive framework and may be responsible for one or more vil- a substantial share of recurrent costs are covered by state lages or habitations. There are approximatelly250,000 gram grants; for urban schemes, local administrations are re- panchayats in India, each of which serves an average popu- quired to reimburse the boards for the cost of prelimi- lation of 5,000.Gram panchayats,however,varysubstantially nary investigations as well as 12-15 percent for the cost in size from state to state. In Kerala and West Bengal, gram of design and supervision, with shortfalls on recurrent panchayats are extremely large,with an average population costs borne by the state. of 21,600 and 14,8001,respectively. In contrast, in Arunachal With the recent move toward decentralization, a mix of Pradesh they are quite small,with an average population of agencies-haveevolved,includingstate publichealth engineer- 700 (Oommen et. al., 1996). Table 2.2 provides the number ing departments, state boards and district engineering agen- and average population of India's districts, b'locks,and gram cies.The institutional arrangements in 13 states are presented panchayats by state. in Table 2.1. In each agency, functional responsibility is as- Gram panchayats have the power to make by-laws and cribed according to the nature of the water source (surface constitute statutory bodies with responsibility for handling or groundwater), the type of scheme or technology (hand government funds,collectingrevenue and delegatingrespon- pump or power pump), the function performed (investiga- sibilities. This provides an opportunity for developing a tions and drilling, construction or operations and mainte- working relationship between the elected body of local gov- nance), and location (urban or rural). In some states, such ernment and user committeesor societies.Although,in prin- as Maharashtra, the organizational matrix is complicated. ciple, democratic representation would emure community The Groundwater Survey and Development Agency is re- participation, in reality a number of problems must be ad- sponsible for hand pump programs, the Maharashtra Water dressed. Real community participation in decision making Supply and Sanitation Board is responsible for piped water requires that the local community be active and informed supply, the district is responsible for operating and main- so it can monitor and influence what the local government taining all drinking water installations, and the Irrigation is doing. Especially when the local government is in a na- Department is responsiblefor drinking water sources down- scent state, several issues need to be addressed. stream of command areas. First, the Panchayat Raj Act is being implemented Despite the apparent organizational complexity, the slowly, because it is subject to political negotiations in the national trend is to decentralize capital investment re- states. Despite the provisions for including weaker seg- sponsibilities to zilla parishad engineering departments ments of the community, social and cultural factors of- at district and block levels, and operations and mainte- ten restrict the voice and role of scheduled castes, nance activities to district and, in many cases, gram scheduled tribes and women in local decision making. panchayat levels. In Karnataka the state Public Health Second, the Panchayat Raj Act brings party politics down Engineering Department (PHED) consolidates, reviews to the community level. Polarization and factionalism Public Health EngineeringDepartment Investigation,design, execution,operations,and maintenance Water Supply and Sewerage Board Investigation,design, and execution Public Health EngineeringDepartment Investigation,design, execution,operations,and maintenance Zilla Panchayat EngineeringDepartment Investigation,design, and execution Panchayat raj institutions Operations and maintenance Water Authority Investigation,design, execution,operations,and maintenance Madhya Pradesh Public Health EngineeringDepartment Investigation,design, execution,operations,and maintenance Water Supply and Sewerage Board Investigation,design, and execution (regional schemes. village schemes servingmore than 2,000 persons) Groundwater Survey and Development Investigation,design,and execution (village schemes servingmore Agency (Rural Deve!opmentDepartment) than 2.000 persons) Panchayat raj institutions Operations and maintenance Public Health EngineeringDepartment Investigation,design, execution,operations.and maintenance Water Supply and Sewerage Board Investigation,design, and technical.sanctioning Public Health EngineeringDepartment Execution. operations,maintenance, and regional schemes Panchayat raj institutions Operations,maintenanceand spot-source schemes Water Supply and Drainage Board Investigation,design, execution,operations.and maintenance technical assistance Panchayat raj institutions Operations and maintenance Uttar Pradesh JalNigam Corporation Investigation,design, execution (for all regions),operations,and maintenance(for regions not covered by JalSansthan) JalSansthan (District Engineering Operations and maintenance(for specified regions only) Section- Garwahl,Kumaon,Jansiregions) Public Health EngineeringDepartment Investigation,design,and execution Panchayat raj institutions Operations and maintenance Source:Ghoshe t al., 1995. make broader community participation difficult to attain states prior to the 73rd amendment, they are currently be- and weaken the credibility of many gram panchayats. In ing established nationwide. At present, there are approxi- the World Bank-assisted Uttar Pradesh RWSS project, only mately 5,000 block-level administrations nationally, each two out of 90 village water and sanitation committees of which is responsible for an average population of chose the head of the gram panchayat as their chair. Third, 120,000. While blocks in the vast majority of states serve the rules and regulations of the Panchayat Raj Act do not a population ranging between 100,000 and 150,000, in a automatically ensure the involvement of all stakeholders, few states, namely Andhra Pradesh and Arunachal particularly rural women. Pradesh, they serve only 44,200 and 9,500, respectively The block is the intermediate tier in the local admin- (Oommen et. al., 1996). The district is the top tier of lo- istration framework. Although blocks did not exist in all cal government. There are approximately 500 districts Table 2.2. Number and Average Population by State Administrative Unit Rural Number Average population State or union population Gram territory (millions) District Block panchayat District Block Gram panchayat Andhra Pradesh 48.6 22 1,100 20,244 2,210,000 44,200 2,400 ArunachalPradesh 0.8 12 79 1,158 62,800 9,500 700 Assarn 19.9 23 199 2.486 866,300 100.100 8,000 Goa 0.7 2 * 183 345,000 * 3,800 Gujarat 27.1 19 183 13.256 1,424,400 147,900 2.000 Haryana 12.4 16 l I0 5.958 775,500 1 12,800 2,100 Hirnachal Pradesh 4.7 12 72 2.92 1 393,500 65,600 1,600 Karnataka 31.1 20 1 75 5.64 1 1,553,400 177,500 5,500 Kerala 21.4 14 152 990 1,529.900 140,900 21,600 Madhya Pradesh 50.8 45 459 30,922 1,129,800 1 10,700 1,600 Maharashtra 48.4 29 297 26.894 1,668,900 162.900 1,800 Manipur 1.3 3 9 166 443,800 147,900 8,000 Punjab 14.3 14 136 1 1.59 1 1,020,600 105.000 1,200 Rajasthan 33.9 3 1 237 9.185 1,094,800 143.200 3.700 Sikkirn 0.4 4 * 148 92,400 * 2,500 Tripura 2.3 3 16 525 778.500 145,900 4.400 Uttar Pradesh 111.5 66 90 1 58,605 1,689,400 123,700 1,900 West Bengal 49.4 17 340 3,325 2.904.100 145,200 14,800 Andarnan and Nicobar 0.2 I n.a. 67 2,100 n.a. 3.100 D and N Haveli 0. I - - - - - - Darnam and Diu 0.I - - - - - - Total average 25.2 19 419 10,224 1.05 1,853 138,267 4,774 *Two-tier panchayat(district and gram panchayat). I -Not available. I Source:Institute of Social Science, Data Base and Information System. New Delhi. nationally, serving an average population of just over 1 different sections of the population, panchayat raj insti- million. Districts vary between 2,100 persons in Andaman tutions came to be seen as vehicles for providing more eq- and Nicobar, 62,800 in Arunachal Pradesh, and 2.9 mil- uitable local planning and area development. In 1978, the lion in West Bengal (Oommen et. al., 1996). Mehta Commission recommended a two-tier structure, Developing and strengthening the panchayat raj in- including the district and the mandal panchayat, which stitutions and developing rural areas through local gov- would represent a cluster of villages with a population ernment are cornerstones of India's current policy. ranging between 20,000 and 30,000. The commission also Initially, panchayat raj institutions were seen as vehicles recommended making the district the pirimary unit of lo- for promoting democracy at the grassroots level. However, cal government, where panchayat elections at both levels as macro planning strategies failed to address develop- would encourage the official participation of all political mental needs across regions, sectors and economically parties. Three states, Andhra Pradesh, Karnataka, and West RURAL WATERSUPPLY A N DSANITATION Bengal, took steps to revitalize their panchayat raj insti- the major recommendations.Despite this variation,all states tutions accordingly. have passed the legislation needed to implement the amend- Constitutional amendments were proposed in 1989 and ments.All but three states have conducted electionsfor their 1990 to establish local governments as the third tier of gov- panchayat raj institutions. ernment nationwide. Neither of these amendments was passed.In December 1992, however, Congress finally passed Assessment of institutional performance the 73rd and 74th amendments to the Panchayat Raj Con- stitution Act. The 73rd amendment, which addressed rural Planning panchayats, proposed a three-tier system of panchayat raj Planningin India currently involvesdesigningprograms that institutions: zilla parishads at the district level; taluk meet coverage targets based on the government's norms of panchayats at the block level (although in some statesblock 40 litres per capita per day (lpcd) of safe water.With the as- and taluks are not completely coincident); and gram sistanceof district level agencies, the state water agency (ei- panchayats at the level of a few villages. The 74th amend- ther the public health engineering department or the water ment, which addressed urban panchayats, proposed estab- board) compiles a list of villages classified as 'not covered', lishing a corporation at the state level constituted by 'partially covered' or'fully covered:Viages that are not cov- municipalities,whichin turn should be constituted by nagar ered or are considered problem villagesreceive first priority panchayats as the lowest tier. in the annual plans, while partially covered villages receive One of the most important provisions of the amend- second priority.Thisclassification processand its utilization ments was the delegation of power and responsibilityto the are not without imperfections. During the Eighth FiveYear panchayat raj institutions within the federalstructure of the Plan, for instance,75,782 not-coveredand 332,454 partially- Constitution. State legislatureswere empowered to provide covered habitations did not receive the minimum supply of the panchayat raj institutions with the power and authority water. The Ninth Five-Year Plan proposes to cover all un- necessary to enable them to function as institutions of local covered habitations by 1997-98 and all partially-covered government. Responsibilities delegated under the 1lth habitations by 2000. scheduleof the constitution include overall responsibility for The persistence of villages that are not covered or par- the preparation and implementation of plans for economic tially covered could be explained by a planning process development and social justice. In rural areas, 29 subjects which, as currently implemented, overlooksthe need to pro- were added to the jurisdiction of panchayats, including re- vision for maintenance, rehabilitation and rejuvenation of sponsibilityfor drinkingwater,minor irrigation, water man- existingfacilities.The not covered categoryincludes villages agement and watershed development. where schemes have fallen into disrepair, thus qualifying Under article 243 (I), the state must constitute a fi- them for new construction. Poor assessment may mean, for nance commission to review and recommend measures for instance, that costly piped water is provided to communi- improving the financial position of panchayat raj institu- ties whose existing systems would need only minimum in- tions and enabling them to discharge their responsibilities. puts to make them sanitary, while remote and poor areas Finance commissions are expected to recommend an ap- continue without service. Moreover, coverage is provided propriate level of grant-in-aid, which is to be provided by primarily to main habitations while outlying hamlets,which both the central and state administrations.This willsupple- generally house poorer and low-caste populations, areeither ment the existingfunds received from both central and state not covered or poorly covered. A documented case study is governments in conjunction with ongoing rural develop- that of eastern Uttar Pradesh (Pant, 1996). ment schemes. Moreover,the panchayat raj institutions are At present, planning is supply-driven and neither takes authorized to levy and collect taxes, duties and adminis- into account user preferences(and ability to pay) for differ- trative fees. ent levels of service, nor provisions for possible future de- To date, the Panchayat Raj Act has been applied incon- mand arising from higher incomes and expectations. The sistently across states. While some states have adopted its lack of demand orientation constrains system performance principles in their entirety, other states have ignored even and aggravates already inadequate service delivery to the ~NSTITUTIONAL RAMEWORK AND F SUSTA~NAB~L~TY poor. In states such as Kerala, Maharashtra and Punjab for due to the overriding strategy which bases planning on instance,severe under-estimation of demand for privatecon- strictly followed water supply norms. nections has caused technical problems as increasinglymore Despite recommendations for integration ofwater sup- better-off households tap illegally into the under-designed ply and sanitation, separate and distinct program funding systems.By drawing on water for higher per capita use lev- makes it difficult for integration to be achieved. Central els, these households curtail quantities available to poorer funding is through the ARWSP for rural water and through households at the end of the pipeline. the Central Rural Sanitation Programme for sanitation. At At the block level the assistant executive engineer pro- the state and district levels responsibility is further divided, vides the first inputs for planning by verifying installations with sullage drainage projects being funded under Jawahar in the field and then applying a population criterion to de- Rozgar Yojana, a program for alleviating rural unemploy- termine the level of service for anyone villageor hamlet. For ment. The result is that village drainage is always imple- example, a habitation with more than 500 persons might mented independently from water supply, undermining the qualify for a small power pump scheme, while a population potential health and economic benefits of the integrated ap- of more than 1,000 might qualify for a piped water scheme proach. with standposts. This accounting is limited to public sources. Clearly, the target-driven strategy underpins the ob- This assessment is then translated into a proposal for a new served poor sustainabilityof schemes,and a planning mecha- or augmented scheme with associated costs, which is then nism is needed to take into account the status of existing passed to the executive or superintending engineer for ad- systems, level of service desired, and availability and ministrativk approval. At this point, financial and technical affordabilityof resources (seeBox 2.1). Thiscan onlybe done considerations take over the planning process. in the context of a demand-driven approach in which the This approach has severalconstraints. Perhaps the most user groups take the lead. important is that it only assesses government installations, even though private and traditional wells mayconstitute the Project Design And Physical lmplernentation primary source of drinking water.Second, it is inflexible and Implementation, i.e. design, procurenlent and construc- does not lend itself to the consideration of alternative or ap- tion management of rural water supply schemes, has un- propriate designs. Third, it does not integrate water supply til now been the direct responsibility of state agencies. A with environmental sanitation. Lastly, it has no latitude to sample evaluation survey conducted in 1996 found that accommodate the demands of users. These constraints are 24 percent of the selected districts were not covered by Box 2.I. Lessons from the CommunityWater Supply and Sanitation Project in Sri Lanka Mirissa, a candidate for financing under the Sri Lanka Community WSS project, is a coastal fishing community located where all wells are brackish and drinking water is unavailable. Following a technical evaluation of the options, project managers decided to construct a well 400 meters from the coast at the bottom of a hill, although this was a costly solution.The inabillity of the users to pay for the schemes' operation and maintenanceled to its subsequent closure by the government.Attempts by thevillage Fishery Society to resolve the problem ultimately led to a decision to reopen the well and sell water to fishing boats.With the revenues obtained from the sale of water, they were able to sustain provision of their water supply from the well.Althou~ghthe project for water supply and sanitation was designed with a community-based approach from the outset, the rules did not: explicitly address the need to respond to the demands of beneficiaries.Instead, they focused on providing servicesto communitiesthat were deter- mined to be"in need."The project therefore offered only a limited number of technical options and a minimum levelof service.The Mirissa experience points to two lessons: first, the need for communities to understand the financial implications of investment decisionsat the planningstage, and second, that once responsibilityfor managementis transferred to the commu~nity,users can and do devise innovativesolutions to sustain the schemes. satisfactory water resource investigations; 32 percent of control. The Indian engineering cadre has the capability of the schemes were poorly constructed; and a large num- designingand executing high-qualityschemes.Staff urgently ber of piped water supply schemes were broken as a re- need to be introduced to and trained in modern methods sult of inadequate initial design, substandard materials of qualitycontrol,and firm action must be taken against con- and workmanship, and insufficient maintenance (GOI, tractors who supplylow quality materialsor construct poor- 1994b). If this situation persists, rural water supply quality work, and against supervisors who ignore schemes will continue to deteriorate, increasing the need substandard work of contractors. for expensive rehabilitation. Under the demand-oriented and client responsive ap- Most engineering problems stem from inadequate data proach envisioned for the sector, communities will have ac- and assumptions regarding the quantity as well as the qual- cess to relevant information, and will exercise control or ity of water resources. In most states the design and corre- oversight at each stage of planning and implementation in- sponding capital cost estimateshave to be within a maximum cluding over data, cost estimates,and rate schedulesto sup- per capita standard, which can lead to use of sub-standard port planning and design, tendering and evaluation materials and technical solutions. For example, the advan- procedures, and site-supervision reports. This should mini- tages of high-quality components such as improved techni- mize the use of substandard materials and incorrect mea- cal and economic feasibility, are not routinely considered surements when preparing work schedulesand invoices. once the cost of the individual components exceeds the maximum price schedules. OperationsAnd Maintenance Procurement and tendering procedures are closely Despite the complexity in institptional arrangements,op- linked to the technical sanctioning of schemes, which is a erations and maintenance arrangements can generally be responsibilityof the state agency. The levelof sanctioning is categorized by type of technology: hand pumps, small generally retained and controlled at the highest level in the piped systems or large piped system^.^ Prior to the 73rd organizational hierarchy. In several states the executive en- amendment, responsibility for operations and mainte- gineering level can only sanction costs up to Rs. 400,000, nance in each state was shared by either the water supply typically less than the cost of a minor village piped water and sanitation board or public health engineering depart- scheme. Consequently,designsoften have to be approved by ment and the engineering section of the district or block a superintending engineer or even a chief engineer. These administrations. Followingenactment of the 73rd amend- low ceilings constrain the smooth and timely execution of ment, the responsibility for rural water supply has de- government as well as donor-supported projects. Typically volved to gram panchayats. Responsibility in this context the state agency procures materials centrally, guided by de- is poorly defined, although it always includes operations tailed technicalspecificationsand tendering procedures.The and maintenance and sometimes includes planning and materials are subsequently provided to private contractors implementation. In practical terms the enactment has who arrange hiring of labor. Due to inflexibilityof govern- meant a significant change in policy for hand pump and ment procurement procedures, especiallyin scheduling and spot-source schemes. Both the Panchayat RajAct itself and scope of the project, serious delays in the execution and guidelines issued by the Rajiv Gandhi Mission in 1994, completion of projects are often experienced. specify that gram panchayats are solely responsible for the Quality construction will typically entail only minor operations and maintenance of hand pumps and spot additional expense and effort in the long term. In contrast, sources. Not surprisingly, however,neither the Act nor the use of substandard materials and low-quality construction Rajiv Gandhi Mission assigns responsibility for large or generally reduces the productive life of the structures and regional piped water supply schemes to local administra- accelerates the scheduling of rehabilitation or replacement. tions. Recent discussions suggest that responsibility for Design and supervision staff, at the field as well as manage- these larger schemes will likely be devolved to the blo'ck ment levels, need to appreciate the importance of quality or district administrations. 'Traditional public sources,such as shallow tube wells or dug wells,are generallyma!intainedby the community, with government intervention limited to chlorination. 20 ( Table 2.3. Condition of ExistingRuralWater Supply Schemes in India. 1994 I Total number Require repair or rehabilitation Defunct Type of technology installed Number Percent Number Hand pumps schemes 2.07 1,569 459.887 22.2 254,000 12.3 Piped water schemes 1 16,324 44,565 25.8 - - Standposts 1.528.000 278.000 18.2 - - 1 I -Notavailable. I I Source: GOI. 1994~. The inadequacy of the existing operations and mainte- The operations and maintenance of hand pumps is nei- nance systems, and the reluctance of local administrations ther technically nor financially beyond the abilitiesof com- to take on responsibility for them, are well documented. A munities to handle. The only possible difficulty may be a survey undertaken by the Rajiv Gandhi Mission in 1994 es- ready access to spare parts in some parts of the country, timates that more than one-third of all hand pump schemes which would be improved when the government reduces its installed require either repair or rehabilitation (22 percent) dominance over procurement of materials. In attempting to or are completely defunct (12 percent), almost 26 peicent surmount this challenge, two major con~straintsmust be ad- of all piped water schemes require repair or rehabilitation, dressed: first, is the irrelevance of some hand pumps facili- and 18 percent of all standposts are without taps. Over-ex- ties due to availability and reliabilityof'alternative sources; ploitation of groundwater and adverse water qualitymayalso and second, is the general disrepair of existing schemes. A contribute to the demise of some hand pump schemes.How- critical consideration in addressingthe first constraint is the ever, the poor condition of rural water supplyschemesis pri- potability or safetyof the alternative sources.Continued ex- marily the result of inadequate and ineffectiveoperations and penditure to maintain the handpumps would be misplaced maintenance. Table 2.3 provides a summary assessment of if the alternative sources are in fact safe. If they are not safe, the condition of existingschemes. the appropriate action would be to sensitize the community HandPumps.Hand pump schemesaccount for 95 per- on the need for Ireatment of the water to safe levels prior to cent of the publiclyfunded rural watersupply schemes,serv- use, or for switching their water supply source to the exist- ing almost 395 million people (75 percent of the rural ing scheme (presumably a safe source). In the second case, population). Publicly funded hand pumps are generally funds must be provided to restore the schemes to the de- maintained by local administrations through a one-, two-, signed standard. Government support to this effort should or three-tier arrangement involving the state agency in rou- be through matching of local contributions, which should tine and major repairs. Piped water supplyin the case of mini be set high enough to signaltrue commitment to the scheme or small schemes are operated and maintained by local en- by the community, and instill in them a sense of responsi- gineering departments only if ownership has been trans- bilityfor the assets.Provision of matchingfunds (referChap- ferred to them. For the majority of piped schemes, ter 3) should be conditional on full community awareness particularly large regionalschemes,responsibilityfor opera- of the user involvementand asset transferprogram, and com- tions and maintenance remains with the state agency in munity acceptance of asset ownership with the attendant charge of planning and implementation, often by default responsibilities. given the unwillingness of local administrations to assume Small Piped Schemes. For mini and small piped management or financial responsibility. In Maharashtra, out schemes, which rely on powered pumps and spot sources, of 250 piped water schemes constructed, 54% have been the situation and solution are similar to that of hand pumps. transferred from, and 44% are still being maintained by, the Technical skills required do not exceedthe local capabilities. state water board. In West Bengal only 15 percent of such Operation is a simple procedure involving turning the schemes have been handed over to the zilla parishads. pump on and off at scheduled times. Local mechanics or contractors who service private irrigation pumps are avail- ening cross-jurisdictional coordination mechanismsor cre- able to undertake repairs and preventive maintenance, and ating and strengthening a new regionalagency (whichwould spare parts are generally available.Local mechanicshave the be owned by the concerned jurisdictions). skills to repair broken taps, as well as leaks in the holding State boards or authorities, however,offer the advan- tanks and source pipe. Although the recurring costs are tage of autonomy in principle only. Despite having the higher than for hand pumps primarilydue to electricitycosts, legal authority, state water boards or authorities in India they are still affordable to local communities. The key chal- are rarely allowed to make autonomous decisions, and are lenge for these existing schemes would be to transfer own- typically subject to government intervention on critical ership and responsibility for them to the communities. policy decisions, including setting tariffs, determining Large Piped Schemes. Complications arise for large staffing levels, and gaining access to external sources of piped water schemes that rely on surface water sources and funding. If these disadvantages could be-addressed, state subsequentlyinvolvetreatment processes.These schemes are boards or authorities could offer a viable transition or technicallychallengingto operate and maintain, and the re- long-term institutional alternative for states (such as curring funds required are substantially higher. These Kerala) that have invested heavily in large axd regional schemes may also transcend administrative boundaries, fur- piped water schemes. Table 2.5 provides a list of precon- ther complicating local capabilities to effectively maintain ditions for choosing among alternative management ar- them. Advantagesand disadvantagesof existinginstitutional rangements for piped water schemes. mechanisms (see Table 2.4) would need to be weighed against feasible alternatives.One option would be to main- MonitoringAnd Evaluation tain state responsibility for all large schemes irrespectiveof The present RWSS monitoring and evaluation mechanism coincidence of coveragearea with administrativeboundaries. is inadequate for the needs of the sector.The system,which Another option would be for the state agency to retain re- produces periodic reports at local levels and then aggre- sponsibility for multi-jurisdictional schemes, and devolve gates them to state and central levels,captures the progress O&M responsibility to the respective local level where ser- of program activities but does not assessscheme function- vice area and administrative (block or district) boundaries ality or performance (availability, adequacy, quality of fa- coincide. Under this option, there would be a need to cilities or user satisfaction). Existing monitoring methods strengthen the local agency with the requisite management serve only one purpose: to verify the progress of physical and technical capabilities, including in procurement and and financial indicators to establish eligibility for central contract administration to enable possible contracting out funding. Monitoring of groundwater resources is similarly of functions. Given the ubiquity and likely increase of cross- driven by an underlying objective of identifying over-ex- boundary schemes, a third option can be considered com- ploited areas, to which access to credit for further devel- prising devolution of all schemes to local levels and opment would subsequently be restricted by the banking strengthening institutional capabilities, either by strength- sector.Monitoring of water quality is a recent phenomenon Table 2.4.Advantages and Disadvantagesof ExistingInstitutionalArrangements Advantages Disadvantages A higher level of in-house technical expertise. No consumer orientation. Potential efficiency gains as a result of economies of An emphasis on atechnicalapproach with numerical targets scale (labor mix, spare parts procurement, spare parts in which operations and maintenancehave little priority. inventory,billing and collection). Flexibletariff structuring that can support cross-subsidization A well-entrenchedbureaucracy,which offers limited capacity (business versus household,urban versus rural). for responsiveness and little flexibility. Limited management and financial autonomy. Table 2.5. Institutional Pre-conditionsfor Management of Rural PipedWater Schemes Institutional alternative Precondition Local administrative agencies In-house Existence of a village water supply and sanitation committee (VWSSC). Existence of an operations and maintenance section that reports to both theVWSSC and the panchayat raj institution. Presence of policy and performance standards for O&M. Presence of a monitoring and performance evaluation system. Presence of an appropriate incentive system. Service contract Presence of procurement and contract expertise. State agencies Departments or branches, Presence of a customer service section for respondingto consumer inquirilesand & State boards or authorities communicatingwith the public. Management and financial authority to set tariffs,disconnect servicesmake dacisions on personnel matters. Presence of an operations and maintenancesection. Presence of policy and performance standards for O&M. Presence of a monitoring and performance evaluation system. Presence of an appropriate incentive system. initiated by the central government. As of April 1994, 115 local participation. Devolution, the fullest extent to which district-based laboratories and 22 mobile labs for monitor- decentralization can be taken, holds the most promise for ing water quality were receiving central financing. As re- participation of users.In devolvedsystems,the responsibili- ported by GO1 (1994a),however,this program lacks strong ties and powersfor a rangeof operationsspanning more than commitment or support of the state governments. one sector are assigned to local governments by the central The monitoring and evaluation system should be tai- authority. For F.WSS in India, the trend is to transfer plan- lored to the new institutional setting. Monitoring and evalu- ning and implementation functions from state boards and ation are essential tools for stakeholders, ranging from users public health engineering departments to zilla parishad en- in the community to policy makers in central government gineering departments at the district and block levels. Op- agencies. The new system should include both quantitative erations and maintenance functions would be transfered to and qualitative indicators of performance, to enable timely the panchayat raj institutions. By and large,state-levelagen- availabilityof information to support decision making and cies have retained a limited role in scriltinizing technology proactiveresponsivenessof provider agencies.Afurther need and sanctioning projects, and they monitor and conduct is for states to formulate state-level policies with appropri- training. In some states they still undertake hydrogeological ate regulations and guidelines for conducting monitoring investigationsand drilling, although zillla parishad engineer- and surveillance of water quality at the source, at the distri- ing departments are usually free to commission the use of bution points, and at the point of delivery to the consumer. departmental or outside rigs. Because state public health engineering departments Decentralization to local levels and water boards have a poor track record, decentralization isviewed as an opportunityto provide more responsiveplan- Decentralizationencompassesavarietyof institutional struc- ning and delivery of services. One of the main arguments tures, not all forms of which will result in adequate levels of for decentralization is that the panchayat raj institutions can accommodate local aspirations and needs better than the capacity to undertake effective operations and mainte- centralgovernment.As such the gram panchayats,asthe low- nance and other sustainable management activities. est level of government, and together with the local com- These constraints are due in large part to a wide distri- munity, should locate facilities, choose technology, and bution of responsibilities across agencies and unclear lines determine and monitor payments. Because they representthe of accountability. Other constraints, which are inherent in local constituency,gram panchayatswould more effectively the"designand construct"nature of existingrural water sup- own, operate and maintain the community assets con- ply agencies,are: poor hydrogeologicalinvestigations,a rela- structed. I-fowever,as discussed later in this chapter, owner- tively high percentage of improper design leading to cost ship and management must be community based and as free overruns, and limited quality assurance despite a compre- as possiblefrom the bureaucracy and politicizationstill pos- hensive set of built-in controls. A number of functionality sible at panchayat levels. A community village water supply studies, such as those conducted by DANIDA-assisted and sanitation committee (VWSSC)under the panchayat is projects in Tamil Nadu and Karnataka, have found that the desirable and will help shield water supply decisions from quality of construction has deteriorated under decentrali- potential bureaucratic hurdles. Further, although there are zation, and this will have seriousimplications for servicede- also potential pitfalls with this as well,VWSSCs could oper- livery performance and ongoing operations and ate independentlyof the panchayatin situations where their maintenance. legal status is clear. In essence, the weaknesses associated with the sup- Despite the promise, decentralization to the district ply-driven approach of the parent engineering agency are and block levels has posed several problems. First, is the now being passed on to the decentralized district and lo- split responsibility between administrative levels result- cal agencies. Karnataka, for example, is attempting to de- ing in poor accountability. With public health engineer- centralize planning and design from the district to the ing departments conducting investigations and drilling, block level, bringing these functions closer to the zilla parishad engineering departments planning and ex- panchayats and hence the users. In reality, however, de- ecuting works, and neither of these being responsible for centralization is having a positive impact only where the operations and maintenance, there is little incentive for assistant executive engineer's subdivision has been these departments to ensure that what they design and strengthened and reoriented. The existing supply-driven construct will function reliably and efficiently. It is no context does not incorporate user demands and, ulti- surprise, therefore, that gram panchayats are typically re- mately, is not accountable to users. luctant to assume responsibility (as assigned them) for Other problems are inherent to the make-up of the operations and maintenance of the schemes. The second panchayats themselves. In consequence, the actual and po- problem pertains to the weak coordination between public tential rolesof the panchayatsin rural watersupply and sani- health and zilla parishad engineering departments and tation should be critically assessed. The first and most delays in according financial and technical approvals and evident aspect is that gram panchayats are almost entirely sanctions, which inordinately delay implementation of implementing development programs inherited from state works. Financial powers of executive engineers at the dis- and central governments. They have little autonomy to trict level are often limited, necessitating the referral of implement programs of their own. Development priorities, many decisions back to the state agency.Third, is the weak and consequentlygrants-in-aid,are defined at the centraland interaction of state and district agencies with the state levels,and gram panchayatscan function only aseffec- panchayats, which limits the ability of the higher admin- tively as permitted by those two tiers of government. In the istrative leve!s to recover dues from the panchayats. In guiseof legislative control over grants, central and stategov- addition, the anticipated benefits of decentralization ernments continue to control the day-to-day functioning of have not materialized because of financing from multiple panchayats(Meenakshisunderam, 1995). sources (for example, sanitation funds are channeled The most conspicuous problem is the lack of finan- through a range of separate programs that are indepen- cial resources. Karnataka for instance, allocates Rs. dent from water supply activities), and inadequate 100,000 to each gram panchayat (irrespective of the type and kind of scheme) for operations and maintenance of related to the socioeconomic background of panchayat the rural water supply and street lighting. Most of these leaders (Pant, 1996). funds are applied toward electricity costs, leaving very Some state governments and some donor-assisted little for maintenance. Gram panchayats, unlike zilla projects, such as the World Bank project in Uttar Pradesh, parishads, are entitled to levy and collect taxes, but the have recognized the danger of politicizing rural water sup- collection rate is typically very low for water charges as ply through the panchayats. Often, panchayat members for other government levies.As elected bodies, panchayats are private contractors participating due to party politics are reluctant to levy and collect water charges. The few rather than personal interest, and the~ewould be a need revenues generated at panchayat level are from the rental to countervail this by organizing users at the level of the of buildings and taxes on forests, common lands and installation or village. In West Bengal, for instance, the ponds, rather than from water charges per se. Conse- government is advocating the formation of user groups quently, gram panchayats depend on grants from the state around spot sources, having seen the merits of this under which, though accounting for 80 to 90 percent of their the UNICEF-assisted project in Midnapur. Projects such funds, are insufficient, thereby severely curtailing their de- as that assisted by the World Bank in Karnataka, have velopment activities. These grants provide weak incentives demonstrated the utility of establishing user groups (i.e. for performance, and existing accounting systems do not VWSSCs) that have a direct stake in maintaining a sus- promote transparency in the transfer and flow of funds. tainable source of water, are ready to operate and main- There are some exceptions, however. In Karnataka, gram tain it and are resistent to political manipulations. These panchayats use village water supply and sanitation com- user groups need legal backing to be effective and may mittees (VWSSCs) to collect fees on their behalf. Prior to stand a better chance as subcommittees or standing com- Punjab's recent step to provide water free of charge, it was mittees of the panchayats rather than independent enti- a positive example of relatively high collection rates and ties. In the forestry sector, for example, committees low administrative costs, partly due to the opportunity formed under a project assisted by the UK Department available to village revenue officials to retain a percent- for International Development (DFID, formerly Overseas age of the revenue as an incentive. Development Administration) could ncit survive indepen- The third aspect is weak capacity. Training and ca- dently of the gram panchayats. In the World Bank-assisted pacity development are already being addressed by some project in Karnataka, the VWSSCs could only function if state governments. West Bengal and Karnataka, for ex- they were legally recognized as standing committees un- ample, have comprehensive training programs for der the gram panchayats. panchayat members at all levels, although their effective- An effective demand-driven strategy would allow ness has yet to be ascertained. Given the sheer numbers panchayatsand VWSSCs to obtain the water supplyand sani- involved, tremendous resources must be invested in ca- tation services they want and are willing to pay for. In the pacity building. A positive development for the first time transition to a demand-driven strategy, district and block in many states is the inclusion of women in panchayat in- agencieswill probably have to take the lead in working with stitutions, because the 73rd and 74th amendments guar- gram panchayatsor VWSSCs to assess the status of existing antee them a third of all seats. (West Bengal is even installations,prepare a plan of operations, and compile a list contemplating an amendment permitting a subcommit- of technologicaloptions.Theywill have to do more than sim- tee composed solelyof women to manage rural water sup- ply providetechnical services,although NGOsor private sec- ply.) A less positive factor, is the alarming number of tor agencies may be able to offer some of the technical problems evident in states where quotas for backward support needed. Changing from a supply-driven to a de- castes and women have brought in token namesake mem- mand-driven approach requires appropriately oriented and bers, who belie the democratic process that brought them qualified staff and incentives. Appropriate mechanisms, as in. Furthermore, decentralization has strengthened vested well as comprehensive orientation and technical training interests in rural areas, and the bias in favor of coverage supported by central and state matching funds, are needed of main habitations as opposed to outlying hamlets is to facilitate comn~unicationbetween agencystaff and users. Strengthening Community Participation voluntary agencies,community participation has been more successfulwhen it occurs throughout the project cycle than From a national perspective, community participation in duringa single stage.Participationis not effective whenagen- public RWSS services has been negligible. According to cies retain control over the details of implementation, or GO1 (1994a),no water supply program prior to 1994 was when issuesconcerning physicalinfrastructure and technol- seen to offer a viable community participation model.4 ogy are addressed more effectively than issues of social or- Even where the Panchayat RajAct has been implemented, ganization necessaryfor managing project works.The forms communities have only been marginally involved. In this of user participation vary substantially,ranging from repre- respect, there has rather been a bureaucratization of the sentational committees of users to committees dominated panchayats than a democratization of the program. The by the rural elite, and from direct involvement in construc- totally government-provided WSS systems have created a tion to supervision of contractors. culture of dependence in which the water supply system Several realities must be considered when designing is not perceived as common property.Adequate structural community involvement strategies for RWSS: (i) the social arrangements and procedures for community participa- organization in Indian villages is often very heterogeneous tion have not been introduced. In only isolated cases have with differentcaste groups and largedisparitiesbetween rich voluntary agencies been involved and has participation and poor; (ii) local elite often dominate the public sphere, been carefully built into the program. and politicization and factionalism often exist at the com- The continued rarity of community participation is munityleveloutside the sphere of localgovernment;and (iii) puzzling in the face of policy statements emphasizing the social groups, such as low castes,middle castes and women, need for it. Narayan (1995),summarizing the experience often prefer to reach consensus in their own groups before gained from 121 RWSS projects around the world, iden- entering and voicing opinions and demands in the larger tifies the key elements of successful community partici- public domain such as the panchayat (see Box 2.2). On the pation as user investment in capital costs, local ownership side, powerful community members such as large and control, and agency responsiveness to feedback. landowners, merchants or politicallyconnected individuals India's policy clearly contradicts these elements. First, have good managerialskillsfor organizing collective action, water is provided free of cost (up to 40 lpcd), and users have leverage outside the community to lobbyfor assistance, do not contribute to the capital costs associated with and are able to sanction shirkers (Hirschman, 1970; Wade, higher levels of service. Second, ownership of rural water 1987). On the negative side, rich and powerful households supply installations is not transferred to communities-an often ensure their own supply of water to the detriment of abstract"feeling of ownership"is considered to be appro- others-for example, by placing standposts in front of their priate and sufficient, regardless of the concept's basic house or by using all available water upstream without re- weakness. Communities do not have any control over gard for downstream users.The lesson is that sharing a com- what, when, where and how installations are provided. mon risk when cooperation failsis an important impetus to Lastly, mechanisms for communicating feedback from successfulcommunity participation. users to water agencies are poorly developed, with few of- Both the gram panchayats and user committees have fices to which to report defunct installations. In general, important strengths and weaknesses,which offer opportu- water agenciesare not responsive to even this limited feed- nities as well as pose threats (see Table 2.6). The earlier ex- back. Evidently,the absence of these key requirements has perience from Karnataka (Box 2.2) illustrates this point, as to be addressed before successful community participa- well as the potential role of the gram sabha, a body not dis- tion can be established. cussed in this report. In the World Bank project, the NGO Where community participation has been acomponent, Samuha sought to organize communities to undertake op- mainly in projects with donor assistance or facilitated by erations and maintenance. First, the primary organization 'Recent (post 1994) initiatives are now beginning to offer such examples, such as, the recently initiated World Bank-funded Uaar Pradesh RWSS project, modifications under- way in the ongoing World Bank-funded KarnatakaRWSS project, and some NGO and bilateral agency-supported initiatives. INSTITUTIONAL FRAMEWORK AND SIJSTAINABILITY Box 2.2. Local Organizations:Democratic, Representative,or Even Organized? In the World Bank-assisted Karnataka RWSS project, village water and sanitation committees have been constituted as elected bodies, but a few influential persons tend t o dominate the deliberations. However, many more community members participate and negotiate service through smaller caste-based and gender-based groups. Members belonging t o underprivileged sclheduled castes and scheduled tribes and women's groups prefer reaching internal consensus before raising issues in the elite-dominated forum. Although powerful community members exercise social influence through the committees, conflicts on issues affecti~nggroup inter- ests, such as the location of standposts, cattle troughs, and dust bins, are generally resolved through the smaller informal groups (Khatri, 1994). consisted of street groups (one male and one female repre- that a partnership could be more fruitful than an exclusive senting 10-15 houses, with a total of 10-40 street groups in arrangement. a village or small town). These street representatives then Village water supply and sanitation committees can selected two representatives each from eight wards to par- and should be constituted as sub-committees under the ticipate in the village gram sabha. The gram panchayat gram panchayat or as self-standing organizations. Both presented its budget at the bi-annual meetings of the gram institutional options have merit particularly if the user sabha. In theory, the gram sabha was supposed to approve committees are constituted as statutory bodies, which the gram panchayat's priorities. The street groups were not would bestow legal rights and facilitate the transfer of re- registered,however, and Samuha found that the village and sponsibility for management. A disadvantage of the sub- sanitation committeeswere not accountableonce elected and committee structure, however,is the inherent risk that the that organized social pressure was needed. Despite the in- control implicit in the gram panchayat's endorsement herent conflicts between the two types of bodies, some of could subordinate the committee to party political biases. the strengths and weaknesses complement one another so Experience shows that user committees that are free to Table 2.6. Stren&hs andWeaknesses of Gram Panchayatsand User Groups Group Strengths Weaknesses Gram panchayats Elected body with legal recognition, Often dominated by local elite and subject to 1 elections held in almost all states. party-based politicization. Responsiblefor RWSS under provisions of Broader interest and mandate than RVVSS, which the Act. can weaken interest and priority given to RWSS. I Broader mandate that provides a platform Weak capacity. for integrating RWSS into general water Traininginputs required. resource management at micro level. Established quota for representation of women, and scheduled castes and tribes. Community groups Community of users with direct interests Statutory recognition needs to be given by the gram in RWSS. panchayat. 1 An alternative to highly politicized gram Potential politicization at the village and intra-village panchayats. level. Marginalgroups allowed a bigger say. Difficulties in decidingbasis for committee formation Stronger collective and group pressure to because users usually utilize multiple sources. collect funds. Require support for formation and strengtheningof Vwsscs. decide their own rules and setup are better able to inter- (Narayan, 1995). However, socioeconomic units or cells nalize and self-enforce rules and regulations; however,this comprising field-level community workers, although part is dependent on the proximity of the committee mem- of various donor-assisted projects, have not been institu- bers to the immediate users they represent. If appropri- tionalized within the government system. The major chal- ate, user organizations should be free to operate as lenge is to develop the capacity and capability within informal groups, allowing money to be contributed on a government agencies to plan for, manage, coordinate, and, purely voluntary basis. to some degree, mobilize and support both the gram In the United Nations Children's Fund (UNICEF) panchayats and the user communities. projectin Midnapur,West Bengal,informal user groups were organized around spot sources, which enablid them to col- Gender Considerations lect water charges and maintain a replacement fund. Evi- Women generally manage domestic water, and an essential dence from Karnataka is mixed. In some areas village water ingredient of community participation is to improve supply committees, though constituted long before the women's involvement in the democratic decision-making panchayats came into being, cannot now survive indepen- process. The Panchayat Raj Act contains special provisions dently of the gram panchayatsand need legal recognition to for the representation of women -30 percent of the mem- be viable.In other areas the committees themselvesare con- bers elected from scheduled castes, scheduled tribes and trolled by a few influential people. Flexibility is crucial to other backwardcastes must be women.However,panchayats the success of institutional arrangements at the grassroots (and the staff of water agencies)are stilldominated by men, level and to the delineation of the roles and responsibilities and women are often members in name only. of gram panchayats and user groups. These problems could be overcome by making a clearly As experience from Gujarat indicates, associations of targeted effort to reach,motivate, involve,train and thereby user committees or linkages between these committees and empower women. In the Mahila Samarkhya program in interest groups with a broader mandate could prove to be Bundelkhand in Uttar Pradesh, women from scheduled very strong. This type of association can provide the lever- castes and tribes have been trained as hand pump mechan- age needed to deal with panchayat raj institutions and state ics,encouraging them to voice their needsand concerns. On governments,as wellas other interestgroups. It can also pro- a much larger scale,the Self-EmployedWomen's Association vide a platform for sharing experienceand expertise. involving thousands of women throughout the nation, has Clearly, community participation will not happen on campaigned in Gujarat to involve women in rural water sup- its own. Donor-assisted and NGO projects need to inject a ply and sanitation. Issues in the association's membership participatoryelement into this process.Although long-term campaign are that women and their work-related needs and intensive organizational inputs have been, andin gen- should be at the center of water sector policy and projects, eral are, required, this support is not necessarilyexpensive. that women should be involved in every stage of water-sec- In the World Bank project in Maharashtra, activities that tor projects, that traditional and local sources of water that directly support community mobilization and organization support women's access to and ownership of natural re- cost around 3 percent of total investment per village,while sourcesshould be given priority over the developmentof new in Kerala, the socioeconomic units established under mechanized systems, and that women should be consulted Dutch-Danida schemes cost only 2.5 percent of total wa- before public water investments are finalized and made op- ter supply expenses. In contrast, the advantages of invest- erational. Women's associations could provide a strong ing in community participation are well documented framework for community participation. Financial Framework and Viability A fter 15 years of intensive construction of RWSS facilities, India now must consolidate the impressive achievements made. In future, financing and deliverysystems for RWSS will have to meet the expanding needs of a growing population as well as the increasing demand for higher and better quality levels of service. In addition, they must provide tsnough funding to sustain operations and maintenance and make necessaryreplacements. The current financial arrangements, where the government finances all capital and recurrent costs and recoups little of these expenditures from water charges,has proven detrimental to the quality of the infrastructure and the services delivered.Sector investment needs continue to be large, both for new facilities to extend coverage to unserved communities as well as for the upkeep of existing facilities. There is a need for better mechanisms for raising and channelling funds to the sector, and without radical change in sector financing, the sector will be unsustain(ab1eboth physically and financially. Financingof sector investmentsand 7.0 billion, or almost 7 percent of the allocation for rural operations water supply. The central government played a minor role in financ- Fundingof sector investments ing sector investments initially,but since the Fourth Plan has The central government remains financially committed to played an increasinglyprominent role despite the continued providing a minimum level of safe drinking water for all, financial responsibility for the sector accorded the state gov- and as a result it continues to shoulder the full capital cost ernments (Figure 3.3). Central funding increased from 15 of public water supply schemes that further this objec- percent of sector investments during the Fourth Plan under tive. The proportion of the government's total budget that the Accelerated Rural Water Supply Program (ARWSP) to has been allocated for water supply and sanitation since more than 30 percent in the Fifth Plan, and has been pro- the First Five-Year Plan, has fluctuated between 1.2 and 4 gressivelyenhanced in subsequent Plans to reach a current percent of total expenditure between 1956-66 and 1980- level of about 40 percent. As discussedearlier,improved per- 85 (Figure 3.1). The current level of 3.1 percent is still formanceof the sector depends on decentralization to com- considerable by international standards. Over the years, munities and local administrative levels.The increasing role increasing priority has been given to rural areas within of the Center in sector;investments thus clearly presents a the sector (Figure 3.2), with allocations for rural areas formidable hurdle to decentralized planning to the state and ranging from 19 (in the period 1966-69) to 66 percent local levels. (1992-97)of total sectoral allocations. The amount allo- Despite the increasing level of government investment cated to sanitation in the Eighth Five Year Plan was Rs. in the sector in constant terms, statistics show an absence Figure 3.I.WSS as a Percentage of the Central Government Budget,India, 1980-97 4.50% 4.00% 3.50% 3.00"k 250% 200% 1.50"k 1.om 0.50% 0.00% 51-56 5661 61-66 6669 69-74 7479 79-80 8 W 5 85-90 9@92 92-97 PlanningPeriod Source:GOI, 1996. of corresponding improvement in numbers of communi- capital cost assumptions and information on technologies ties served. The large 70 percent increase in capital invest- utilized (adopted from GOI, 1996), the estimated funding ment per capita (1995-96 prices), from Rs. 570 in 1987-88 requirement of capital investment per capita on a weighted to Rs. 970 in 1993-94, was largely due to widespread use average basis is roughly Rs. 630, whereas the average per of relatively expensive technologies, rehabilitation and re- capita cost actually incurred was Rs. 760 (Table 3.1). The placement of existing schemes, and inefficient procurement difference - Rs. 130 per capita or 21 percent of the esti- practices rather than to increased coverage. Using broad mated per capita requirement - can be attributed to 51-56 56-61 61-66 66-69 69-74 74-79 79-00 80-05 85-90 90-92 92-97 PlanningPeriod I Figure 3.3. Central and StateAHocatibns for RuralWater Supply and Sanitationin India, 1980-95 Rs Billion 90 1 either rehabilitation of existing schemes or inefficient pro- replacement of defunct assets or worsening resource con- curement practices. ditions. Assuming an annual rural populatiion growth rate Notwithstanding the low efficiency of RWSS invest- of 2.6 percent (Ghosh et. al., 1995)5,the add~tionalrequire- ments, the sheer magnitude of financial requirements to ment in 1997 alone would be Rs. 11billion. The additional achieve full coverage appear much beyond the ability of the cost of replacement would range from Rs. 17 billion to Rs. government to provide.The sector's capital investmentneeds 25 billion annually,depending on whether the designed life are extensive and will continue to escalate (Figure 3.4). As- of the schemes would in fact be attainable in absence of suming that the existing mix of technology appropriately adequate operations and maintenance fundiing.In the worst reflects the needs of the existing rural population that re- case physical-resource-constrained situation, in which wa- mains unserved, Rs. 110 billion will be required to achieve ter quantity and quality problems required a graduation 100 percent coverage given existing coverage norms. Reha- from hand pumps to piped water systems, the capital in- bilitation of existingschemes will entail an additional Rs.60 vestment per capita cost would be 13 times higher. Assum- billion to Rs. 90 billion (assuming that 10-20 percent of all ing 5 percent of the rural population (or 35 million hand pumps and 20-30 percent of all piped schemesrequire persons) experienced water quality probleins and 10 per- major repair or rehabilitation).The total capital investment cent of these were switched to supply from piped water sys- requirements thus range from Rs. 170 billion to Rs. 200 bil- tems, an additional Rs. 6.3 billion annually would be lion (US$5-6 billion) in 1997. required. The scenario could be taken one step further to The estimates of required sector funding do not take includ'e investments to increase the levels of service deliv- into account several critical factors- population growth, ered to communities. Several states already have or are 'The Ghosh et. al. (1995) growth rate estimate is likely to be an upper bound for the range of rural growth outcomes in India, and would thus lead to an overstatement of the I estimated RWSS sectoral investment requirements. 31 Table 3.1. Capital CostAssumptions,byType ofTechnology Production Capital cost Allocated Population Life capacity litr.1 per capita weighting Type of technology served span minute Source (rupees) (percent) Hand pump 250 10 3.65 Groundwater 1 60 75 Mini piped water scheme 750 15 10.95 Groundwater 500 5 Small piped water scheme 2,000 20 29.20 Groundwater 1,500 5 Regional piped water scheme 5,000 , 25 73.00 Surface water 2,500 15 Town piped water scheme 10,000 30 200.75 Surface water 3,500 >I Note: Estimated weighted average is Rs.630. Source:State rural water supply agencies,and GOI. 1996. considering increasing the basic requirement for safe Operations and maintenance are financedinsteadby allthree water from 40 to 55 litres per capita per day (lpcd). Such a administrative levels through several funding mechanisms decision on a national scale would entail an additional Rs. that lack transparency and accountability. Moreover,poorly 165 billion (US$4.7 billion) in total. defined expenditure classifications,inadequate presentation Although the broad assumptions and the methodology of expenditures by functional responsibilities, and inconsis- employed are overly simplified, this exerciseclearlydemon- tent presentation both among and within states, all make it strates that, under the sector's current financing arrange- extremelydifficultto estimatethe levelof public sector fund- ments, sector objectives are not realistically attainable given ing that has or is being spent to support operations and limited government resources, increasing cost of providing maintenance. basic and improved levels of service,and increasing need to Operations and maintenance are commonly funded by reinvest in existing schemes. To provide 40 lpcd to the en- state administrations through their Non-Plan budgets for tire population within 10 years, ensure that all schemes are recurring expenditures as well as from various national and operational, and that fully depreciated schemes are replaced, state development programs. Under state Non-Plan bud- thecapital investment budget will have to be at least 2.5 times gets, funding is generally limited to salaries for approved its existing level of Rs. 16 billion to Rs. 18billion (US$515 staff, with substantially smaller allocations for recurring million) annually.Basedon historical trends it appears likely goods and services. Financial support from national and that the government will continue to increase the budget al- state development programs, such as the National Rural location for the sector to keep pace with inflation and gen- Employment Programme, the Rural Landless Employment eral economic growth. However, given deficit-reduction Guarantee Programme, and the Jawahar Rozgar Yojana, is objectives and competing government priorities,it is unlikely commonly distributed to each state based on a formula that that future allocationswill increasesubstantially.Other fund- takes into account regional disparities but is based largely ing sources and mechanisms will have to be developed. on population distribution. Each state adds matching funds if required and distributes them to district administrations, Fundingof Operationsand Maintenance which in turn distribute them to gram panchayat admin- Management and financial responsibility for RWSS opera- istrations. tions and maintenance has been divided among various in- Spending is generally at the discretion of gram stitutions at different administrative levels. In each case, the panchayats, which do not impose habitation norms or al- specific responsibilities are poorly defined, and despite ab- locations for specific activities and sectors. Development sence of cost-reflective prices the requisite funding has not program funding is targeted to increase employment and been made available by government for 0&M activities. labor-intensive dublic works. It does not in principle FINANCIALRAMEWORK AND VIABILITY F support operations and maintenance, although funds are operations and maintenance. This amount, which rangesbe- often used for major repairs, rehabilitation, and replace- tween Rs. 100,000 and Rs. 150,000 per gram panchayat per ment of existing schemes and for construction of new year, is provided as a lump sum that has no relationship with schemes. These expenses are typically included under op- the size of population served, the technolc~gyimplemented erations and maintenance. Program reporting formats vary or the actual costs. For gram panchayats with electricity- from state to state and do not provide sufficient or consis- driven schemes, the allocation includes the cost of electric- tent detail. ity. However, the electricity used for water supply schemes In 1986 the central government prescribed expendi- is not separated from electricity used for ather purposes so ture norms for maintenance of water supplyschemes (Table that, in practice, gram panchayats charge the total cost of 3.2). These norms were recommendations only, and states electricity against the allocation for water :jupply. In the vil- were not compelled to adopt them. Each state is still re- lages visited this means that very little is left for other ex- sponsible for determining and adopting norms that take penses that would ordinarily be incurred as part of into account its own situation. Concurrently, a maximum operations and maintenance. In summary, although gram 10 percent of the planned capital investment budget pro- panchayats have been given responsibility for RWSS, they vided by each state under the Minimum Needs Programme have not, in absence of cost-reflective water charges, been was earmarked for operations and maintenance, as was 10 allocated as a substitute, concomitant fiinancial resources percent of funds provided through the ARWSP in 1988- with which to discharge that responsibilit!r. 89. Under these two programs, the government invested Rs. The RajivGandhi Mission (1996) has estimated that Rs. 10.0 billion in operations and maintenance between 1988- 10 billion (US$286million) per year is required to maintain 89 and 1994-95. In constant 1995-96 prices, however, the all public water supply schemes. This is almost four times investpent has fallen 40 percent from Rs. 4.9 per capita (of the current allocation of Rs. 2.5 billion. This amount appar- the popblation covered) in 1988-89 to Rs. 3.5 in 1994-95. ently only coversrepairs.Staff costs, as well as recurring costs This decline does not take into account the substantial in- includingelectricity,aie allocated separately under the Non- crease in coverage. Plan budget and represent about 60-75 percent of the total In addition to program allocations, various states have cost of operations and maintenance. Based on broad cost provided gram panchayats with a specific allocation for assumptions, an estimated Rs. 29 billion (US$830 million) i Figure 3.4. Potential SectoralCapital Investment Requirements in India, 1996-200 1 (billions of 1996 rupees) Assuming 0.5%of RuralPopulationis Seriously lrnpaa byWater QuantiylQmlii Pmb!ems lncrearingthe Norrn.from40 lpcd to 55 lpcd Replacementof Defunct Schemes Rehabilitarionof ExistingSchemes 1996 1997 1998 1999 2000 2001 Servicingthe Unserved t Table 3.2. Government Operationsand Maintenance ExpenditureNorms, byType ofTechnology Technology alternative Expenditurenorm Open tubewell Rs. 45-Rs. 60 per well per year. Hand pump Rs. 400-Rs. 500 per pump per year (currently Rs. 600 per pump). Gravity-fed piped water supply Hilly areas: 7.5 percent of capital cost Desert areas: 8.0-9.0 percent of capital cost Pumpedpiped water supply 5 percent of capital cost (excluding electricity). Source:GOI, 1996. would be required annually to fund the appropriate level of cal examination in view of the emphasis on decentraliza- operations and maintenance (Table3.3). This includes sala- tion. Local administration finances are generally classified ries, electricity(whererequired), chemicals,and routine pre- under four broad headings: self-generated revenue, shared ventive maintenance as well as repairs. Continued revenut, grants and loans (see Box 3.2). Self-generated underfunding of operations and maintenance will continue revenue comprises taxes (such as property and house taxes, to have serious financial implications in the future, because professional taxes, vehicle taxes, various taxes associated major repairs or rehabilitation cost more than preventive with agricultural activities, and entertainment taxes), tolls maintenance, and existingsystems will have a shorter oper- and fees. Also included are revenues derived from locally ating life and have to be replaced prematurely. administered commercial activities and landholdings and The government hasattempted to addresstheseproblems general contributions from the public. Shared revenue is through provision of ad hoc funding (GOI, 1994a).However, the proportion of national and state taxes that is allocated adequate0&Mwill be possibleonlywhenownershipis trans- to local administrations. Grants are provided by the state ferred so that sector institutions are responsible and account- for establishment costs (primarily salaries), maintenance of able and havean adequatelevel of resources (seeBox3.1).Full assets, and implementationof national and state-funded ru- cost recovery is the essentialconcomitant to this. ral development programs. Loans,although uncommon, do exist. In Bihar and Uttar Pradesh, local administrations re- LocalAdministration Financing ceive financing from the state panchayat finance corpora- Local administration finance and the general ability of lo- tion for a broad range of activities. cal administrations to take on the financial management Gram panchayat receipts from central and state gov- responsibilities for operations and maintenance need criti- ernments, in 1989-90, ranged from 0.1 percent of total state Table 3.3. Operationsand MaintenanceCostAssumptions,byType ofTechnology Capital cost Operationscost Maintenance per capita Population per capitaper cost per capita Type of technology (ru ees) year (ru ees) per year (rupees) Hand pump 160 10 250 0 8 Mini piped water scheme 500 15 750 25 17 Small piped water scheme 1,500 20 2.000 70 37 Regional piped water scheme 2,500 25 5,000 117 50 Town piped water scheme 3,500 30 10,000 175 58 FINANCIAL FRAMEWORK AND VIABILITY Box 3.1. KeralaWater Authority-PotentialImprovement in Operations and Maintenance Management Kerala Water Authority operates 38 urban water supply, 2 urban sewerage schemes and 1.4 15 rural water slupply schemes. In 1991-92A. F.Ferguson andcompany analyzedoperating expenses of arepresentativesample of 373 schemes as part of a cost and revenue study.The study found that the direct cost of operating these schemes increased as the size of the scheme decreased so that the smallest rural schemes had the highest operating costs per unit volume of water produced.The most critical factor was the high cost of labor.Almost50 percent of the operations and maintenance costs of rural water supply schemes was spent on the wages of pump 0perators.A review of 28 rural water supply schemes revealed that all schemes employed at least one full-time pump operator, more than half employed two, and several employed more than two. Rural water supply pumps, however, are normally operated for only 3 to 5 hours a day in northern districts and 6 to 7 hours a day in southern district:s.Where demand requires that pumps be run for only a few hours a day, it is obviously not cost-effectiveto employ one, two or even more full-time operators, as was the practice in Kerala.10 improve both the efficiency and the cost-effectivenessof operations and maintenance, the independentstudy recommendedthat the KeralaWater Authority train local bodies (administrations)or loc;il voluntary (user) groups, giving them full responsibility for operations and maintenance. Kerala Water Authority would only seive as a technical advisor or "referral point" for major repair and maintenance problems.The local body or voluntary groups would also collect water fees in exchangefor a service fee. income and revenue in Madhya Pradesh (Rs.0.5 per capita), Rs. 164 per capita, substantially more than the average Rs. to almost 8 percent in Uttar Pradesh (Rs. 53.2 per capita) 12 per capita allocated to the gram panchayats. As in other (Table 3.4). Receipts of grants from the central and state states, district revenues in Maharasthra are composed level also varied considerably across states, ranging from largely (96 percent) of national and state grants. Based on Rs. 49 per capita in Uttar Pradesh to Rs. 0.04 per capita in this assessment, if the most favorable situation is projected Madhya Pradesh,with a distribution skewed toward the&w nationally, gram panchayats would account for Rs. 53.2 figure. The most self-generated revenue was achieved in per capita or 2 percent of total government expenditure Kerala (Rs.26.9 per capita) followed by receipts in Gujarat, in 1989-90. Block and district administrations would ac- Goa and Punjab. count, respectively,for Rs. 90.0 per capita (roughly 4 per- The role and responsibilitiesof block administrations, cent of total government expenditure i111989-90)and Rs. particularlythose related to financialmanagement,varysub- 164.2 per capita (8 percent in 1988-89).Districts also have stantially from state to state (Table3.5). In some states such authority to levy taxes though the.y rarely use such pow- as Andhra Pradesh and Gujarat, block level administrations ers. Their taxing authority is poorly defined, making them play an important role in financial management. This is be- hesitant to set a precedent of taxing communities where cause the relative income levels at block level, as a propor- none exists. tion of the population which they serve, are substantially Local administration financing is typically structured greater than at gram panchayat levels. In other states, block so that either the block or the district has the primary role administrations generallyhave a more limited, if not negli- in financial management, while the other plays a more ad- gible, role. Blocks normally rely more heavilyon grants than ministrative role and therefore is accorded financial respon- -- do gram panchayats,and this curtails their use of tax instru- sibility for an administrative budget only. If the ments despite their authority to levy taxes. administrative budget is 25 percent of total finances avail- Districts commonly play a major role in the admin- able to the other two administrative tiers, then total local istration of local finances. State comparisons of district administration expenditure is about Rs. 170 per capita or finances are not readily available; however in one state, 7 percent of total central government expenditure annu- Maharashtra, the districts were allocated approximately ally. Table 3.6 compares local administration finances.This Kerala has a rural population of 21.4 million, which is almost 74 percent of the state's total population.There are 14 districts, 152 block administrations and 990 gram panchayats. Each district serves an average population of 1.5 million, each block serves an average of 140,900 people,and each gram panchayat serves an average of 21,600. For fiscal 199&9 I,the total income for gram panchayats amounted to Rs. 45.1 per capita or Rs. 967 million, of which 70 percent was self-generated, 30 percent was comprised of grants, and less than I percent was provided by loans (Government of Kerala, 1996).Themain sources of self-generatedincome were buildingtaxes and surcharges (2 1 percent), professional taxes (12 percent), entertainment taxes (7 percent), income from market fees (2 percent), property sales taxes (22 percent), donations (I percent), and miscellaneous (27 percent). Other minor taxes and fees, including service taxes, entry taxes, property taxes, vehicle taxes, and fees for licenses, made up less than 2 percent.During the same fiscal year, total expenditures amounted to Rs.43.7 per capita or Rs. 937 million,of which 26 percent was spent on salaries,25 percent on public works, 2 percent on education,3 percent on water supply, 6 percent on electricity,and 38 percent on other purposes. If 20 percent of the expenditure is related to new schemes or rehabilitation andmajor repairs of existingschemes, in addition to direct expenditures on operations and maintenance,then Rs. 3.5 per capita in 1990-9 1 was spent by gram panchayats on -ural best-case scenario substantially exceeds the findings of Gram panchayats require not only basicsupport but also Datta (1992),which estimates local administration expen- sufficient incentives to increase their level of self-generated diture in 1986-87 to be 6 percent overall and 3 percent for income and become more independent. Moreover, they re- rural local administrations (Datta, 1992; Bagchi et. al., quire the autonomy to prioritize and choose investmentsthat 1992). Local administration expenditure is typically below best satisfy community demand. From a management per- 15 percent of total government expenditure in developing spective, they need to understand what trying to meet com- countries, compared with 20 to 35 percent in industrial munity needs will entail and the financial and social countries (UNDP, 1993). iwlications of doing or not doing so. They need to under- The GO1Tenth FinanceCommission has recommended stand and assess the available technology and the merits of that the central government provide states with an ad hoc alternative methods of procurement. If panchayat raj insti- grant of Rs. 100 per capita for rural areas to be distributed tutions are to administer and provide better basic services to panchayat raj and local administrations over a four-year to rural areas, they must be given the opportunity, support, period - 1996-97 to 1999-2000 (GOI, 1994e).This initial and resourcesto do so. step was equivalent to only 0.4 percent of total central gov- ernment expenditure in 1994-95, the year in which the grant Cost recovery and financial sustainability was recommended. Obviously, this percentage will decline each year as annual government expenditures increase. At Poor cost recovery in the sector is primarily due to negli- the state level, some major steps are being taken. The State gible tariff levels which do not reflect actual costs and are Finance Commission in West Bengal recommended in 1995 not routinely evaluated and adjusted for inflation. Poor col- that 25 percent of the state tax revenue be devolved to the lection rates, weakly transparent accounting systems and panchayat raj institutions and local administrations, in ad- weak financial management, exacerbate an already critical dition to the system of transfers and grants already in place situation. In general,water issupplied from publicstandpipes (West BengalState Finance Commission, 1995).This recom- or wells as a public service. This policy, except in the case of mendation translates to 9 percent of the state's total expen- externally supported projects, means that capital costs for diture in 1994-95, or almost 16 percent of self-generated rural watFr supply are fully financed by the government and revenue. Although still to be implemented, it is certainly a that very few rural areas, if any, charge for public water. Al- step in the right direction. though much has been said in favor of cost recovery, very Table 3.4.A Com~arisonof Gram PanchavatFinances.SelectedIndianStates. 1989-90 Total income Total Percent per gram Self-generatedrevenue Shared revenue - Grants Loans income of state panchayat Thousands Thousands Thousands Thousands per capita income State (rupees) of rupees Percent of rupees Percent of rupees Percent of rupees Percent (rupees) (percent) Andhra Pradesh 101.145 6.1 15.0 2.7 6.6 31.87 78.5 - - 40.60 4.7 Goa* 107,022 14.1 49.6 - 6.7 23.5 0.9 3.1 28.38 I.O Guiarat 56,053 15.2 55.2 0.8 2.8 11.6 42.0 - - 27.56 2.3 Haryana 23,363 9.7 88.8 - - 1.2 11.2 - - 10.90 0.9 Himachal Pradesh 17,593 8.4 86.7 0. I 1.4 I.I 1 1 . 1 0.I 0.9 9.68 0.5 Kerala 684,702 26.9 85.6 - - 4.6 14.5 - - 31.43 3.2 Madhya Pradesh 1,299 0.4 92.6 - - 0.0 7.9 - - 0.48 0. I Maharashtra 22,706 8.2 68.3 0.8 6.5 3.0 25.2 - - 12.01 0.9 Orissa 14,942 0.3 14.4 - - 2.0 , 85.3 0.0 . 0.3 2.39 0.2 Punjab 34,465 12.4 47.1 0.3 I.I 13.5 50.9 - - 26.42 1.8 Rajasthan 186,103 2.0 4.9 - - 38.4 95.1 - - 40.37 4.9 Tamil Nadu 8,65 1 I.O 33.3 I.O 31.8 I.I 34.9 - - 3.12 0.3 Uttar Pradesh 80,274 1.2 2.2 2.5 4.7 48.8 91.7 0.8 1.4 53.22 7.9 -Notavailable. *Total does not equal I00percent Source:Oommen and Dam,1995. Himachal Pradesh -Notavailable. Source:Oommen and Dam, 1995;Oommen et. al.. 1996. little has been done to achieve it. Unfortunately, the meagre connections, and not to communities accessing water proceedsfrom water fees are not necessarilyused to support through public standposts. Property and house taxes in operations and maintenance, and the system generallysuf- many states include a small water tariff. In Maharashtra fers from a lack of transparency. for instance, the tariff ranges between Rs. 18 and Rs. 150 The fee structure for rural water in India is complex per household. In some states there is a one-time fee in addition to being inadequate to meet the costs of sup- charged for a private household connection. For externally ply. In almost all cases, rural water fees are charged only funded projects, the connection fee ranges from Rs. 100 - to households or commercial enterprises with individual in some villages in Karnataka to Rs. 1,800 in villages in Table 3.6. LocalAdministration Finances,Selected States, 1989-90 (Rs. per capita) Total local Gram panchayat Block-levelincome District-level income administration State income per capita per capita per capita 1988-89 income per capita Andhra Pradesh 40.6 90.0 32.7* 163.3* Gujarat 27.6 73.5 25.3* 126.3* Haryana 10.9 0.7 - - HimachalPradesh 9.7 1.3 - - Maharashtra 12.0 44.1* 164.2 220.3* Orissa 2.4 n.a. - - - Punjab 26.4 5.0 - Rajasthan 40.4 0.3 - - - Tamil Nadu 3.1 n.a. - - Uttar Pradesh 53.2 2.2 - Average 64.9 27.1* 74.1* 170.0* -Notavailable.*Estimated. Source:Oommen and Dam. 1995;Oommen et. al.. 1996. Maharashtra. In Haryana, the state charges Rs. 1,000. In than 25 percent of the population servledby public schemes all cases, this is over and above the cost of the hardware in Kerala) have a private connection. investment, which is considered the sole responsibility of The GO1 (1996) reports that in 11991-92, cost recov- the household in question. ery of working expenses for rural water supply schemes In addition to the connection fee, households are gen- was equivalent to 1.8 percent, and l~essthan 1.3 percent erally charged a recurring tariff. In Maharashtra, the tariff of total outlays if capital costs are factored in. Even in the for unmetered domestic connections ranges between Rs. 101 more idealized externally-aided proj~ectsetting, cost re- and Rs. 300 annually,whereas for metered domestic connec- covery of operations and maintenance is nominal at best: tions it ranges between Rs. 0.6 and Rs. 1.2 per cubic meter. in such projects, receipts of only 10-30 percent of total In contrast, in Kerala, unmetered domestic connections are billings were observed. Compliance appears to be fairly charged Rs. 204 annually, whereas metered domestic con- high where local taxes or fees contribute directly to local nections are subject to a minimum charge and a progressive finances. In Kerala, where rural and urban connections are tariff for any consumption in excess of 10cubic meters (Rs. not accounted for separately, collection fates for connec- 2.3 per cubic meter for 11-30 cubic meters; Rs. 3.5 per cu- tions, whether domestic or business, are very high, rang- bic meter for 31-50 cubic meters;and Rs. 4.6 per cubic meter ing between 85 and 95 percent (see ]Box3.3). The Kerala for more than 51 cubic meters).In externally funded projects, Water Authority does not have as much trouble collect- a periodic water tariff is also charged to recover the costs of ing from individual households or industrial customers operations and maintenance. In Karnataka, household con- as it does from gram panchayats that manage water sup- nections cost between Rs. 10 and Rs. 20 per month, while plied by standposts or from state authorities or boards stand posts cost between Rs. 1 and Rs. 10 per month. In that operate and maintain schemes. State-run schemes Maharashtra, each household with a connection is charged collect 15-30 percent of billings. Collection rates differ Rs.15 monthly. largely because the KeralaWater Authority has no recourse The presence of household connections is somewhat when gram panchayats refuse to pay, because cutting off contrary to existing policy. National norms do not address the water supply to an entire comnlunity is considered household connections, and.public schemes do not include politically unacceptable. Obviously in cases where suffi- household connections in either the technical or the design cient incentive or motivation exists, collection rates can specifications. Illegal connections are considered to be in- be substantially improved. evitable. From a technical perspective, however, illegal con- Based on broad assumptions about both costs and the nections account for a higher level of consumption than is existing mix of technology,the weighted average cost of op- provided under the national norms, thereby reducing the erating a public scheme is Rs. 22 per capita per annum. Main- level of service for users downstream or at the perimeter of tenance requires an additional per capita Rs. 16, and a the service area. This affects poor people who often live in replacement fund requires Rs. 32 per capita, for a total relativelyundesirable areas. weighted average per capita annual recurring cost of Rs. 71. For all these reasons, it could be expected that the num- In 1991, actual working expenses per capita ranged between ber of house connections would be minimal. The Rajiv almost Rs. 4 in West Bengal and Rs. 79 in Arunachal Pradesh, Gandhi Mission reports, however, that 4.3 million houses in representing an average of Rs. 13 per capita for all India and rural areas receive water from public piped water schemes. less than 18 percent of the estimated requirements (GOI, If each house connection serves an average household of five 1996). Current allocations are clearly inadequate to support persons, a population of 21.5 million persons (or almost 17 an appropriate level of operations and maintenance. percent of those served by public piped water schemes) are served by household connections. In Kerala specifically,there WillingnessandAbility to Pay are 584,000 piped water supply connections of which 91per- So long as the government continues to promote water as a cent are domestic, 9 percent are commercial, and less than 1 social right without community oblig,ations,the public will percent is industrial. Again, if each connection serves an av- be reluctant to pay for what it feels is a government respon- erage household of five persons,2.7 million persons (or more sibility. They will also be reluctant to pay for a low quality supply and sanitation servicesin the state of Kerala.In 1995 it provided piped water to more than 16million persons, 74 percent of whom were urban based and 46 percent rural based. Of those served, roughly 25 percent have house connectionsin urban areas (329,172 connections),compared with roughly I0percent in rural areas (203,389 connections).The remainingpopulation is served by standposts.In 1990-9 1 revenue was comprised of state grants (52 percent),water user charges (45 percent),and other income (3 percent). However, increased competition for limited government funding has encouraged the Kerala Water Authority to be- come more self-sufficient. In 1994-95 the proportion of revenue received from water user charges increased to almost 54 percent of total revenue, partly as a result of successful lobbyingfor substantiallyhigher tariffs and partly as a result of improved billingand collection rates (A. F. Ferguson and Co., 1992). In 1989-90 outstandingcustomer receivables were 54 percent higher than those due at the end of the previousfiscal year.During 1991-92 billingand collection practices were studied, and recommendations made to improve these practices. Subsequent to implementation of the recommendations, collections from domestic, commercial,and industrial connections averaged 98 percent. In addition, in 1994-95 a portion of the arrears incurred by local administrationsfor standpost charges and bulk water supplyfrom state allocations,were recoveredprior to their distribution.With the proceeds from the government transfer, the collertion rate of current local administration billings increased from 7 percent in 1993-94 to 8 1 percent in 1994-95, and again to 1 16percent in 1995-96. service, which in this case has been brought about by free Adopting the view of the World Bank, UNICEF and many provisionof serviceand the resultant lack of funds for O&M. bilateraldonors that water supply and sanitation services are It has been demonstrated repeatedly in many countries that affordableif the cost falls within 3 percent of incomes,analy- the general public is willing to pay for reliable and safe wa- sis shows that while handpumps and mini piped schemes ter supply and sanitation services.Thus the major constraint would on average be affordable to the poor, small and re- to implementing a cost recovery strategy iSthe political un- gional piped schemes would not (Table3.7). With onlyabout willingnessto charge for water. 22 percent of the rural population below the national pov- Assuming a political willingness to charge, willingness erty line (G01, 1996), affordabilityof RWSSschemes (which to pay will depend on the availabilityof alternative and tra- are largely on the lower end of the technology spectrum) ditional sources, the quality and level of service provided, would not be problematic. But this underscores the need to and public perceptions of the associated health and other tailor the investments to the needs of the communities. A benefits.The ability to pay will be governed by the techno- demand-driven investment strategy is critical to ensure ap- logical sophistication of the infrastructure investment. propriateness of investments. Mini piped water scheme Srna!l piped water scheme Regional piped water scheme Private sector financing RWSS investments without a change in sector policies to enable cost-reflective pricing of services.The sector does not Individuals and communities are vital and essential sources currently offer sufficiently attractive returns in either the of financing for RWSS, and in some states are actively short or the long term. This contrasts with the substantial engaged in own-financing of some investments. A house- private sector investment evident in a wide range of manu- hold field study in Kerala, for instance, estimated that 46 facturing and other service sector^.^ High-risk,long payback percent of all households in panchayat areas depend solely periods and pricing limitations of the RWSS sector as pres- on their own open well or borewell (KeralaWater Author- ently structured, serve as serious disincentivesto potentially ity, 19923.The study also found that an additional 23 per- interested parties. Such disincentives discourage even gov- cent of all households rely on their own wells in ernment-supported credit facilitiessuch as HUDCO and Life conjunction with another private source. Thus almost 70 Insurance Corporation of India which,despite mandates to percent of all households surveyed rely to varying degrees support both infrastructure and rural dlevelopment, invest on sources that have been privatelydeveloped.While Kerala only a minor proportion of their total portfolio in RWSS. may be unique in the magnitude of private sector invest- In Kerala, where the rural population accounts for 73 per- ment, due to its favorable hydrological conditions that of- cent of total population, loans from these two corporations fer substantially more opportunity for privately developed for rural schemes accounted for only 15 jpercent of the total sources than do the semi-arid or desert conditions found approved financing provided by these agenciesto the Kerala in several other states,the fact remains that households and Water Authority in 1996-97. private organizations all over India have and will continue Thekeyto corporate involvementin the RWSSsectorlies to make major investments in private sources as a matter in implementing reforms to achieve a commercialized de- of basic necessity and desire for convenience,improved per- mand-oriented culture in RWSS entities to tailor operations formance, and higher level of service. Users and main ben- to the needs of user communities, and structure investments eficiaries of capital investment in the sector have an obvious accordingnot onlyto community needs but alsoto their abili- and critical stake in ensuring that their service requirements ties to pay.This will entail greater communityinvolvement in can be satisfied; in the short term they offer the only prac- decision-makingregarding all sectoralactivitiesincludingin- tical alternative to increasing the amount of government vestments, technologies and pricing (including the funding allocations. Cost sharing can and must be implemented, of infrastructure replacements). The sector will need to in- and specific proposals are developed in Chapter 4. troduce and strengthen corporate financial management ca- Own-financing notwithstanding, limited scope existsto pabilities in the water agencies to instill financial discipline mobilize market finance or induce corporate interest in and effectivehandling of cost and pricing issues. 6Atleast two-thirds of all sector investments are channeled into goods and services procured from the private sector Strategy for Sector Reform T o address the major issues confronting the sector,the government's approach must be modified to enable consistencybetween program implementation and the prt:scribed policy. This means implementing a decentralized, user participatory, demand-driven approach including cost-sharing and full cost recovery,and maximum implementation by users at grass-roots levels, thereby ensuring that the public receives the services it desiresin an effi- cient, equitable and sustainable manner. Goals and components each goal of the reform strategy are presented here, and suitable activities are identified for which rnatching cen- The recommended strategy has three service management tral and state funding would be eligible. goals and one resource management goal: To establish an enabling environment, meaning a Enabling Environment situation that politically, legally and institutionally The framework contained in the Eighth-Five Year Plan, supports reform of the sector; which serves as a guide to required reforms in the sector, To ensure institutionalsustainabilityby supporting needs to be translated into policy statements at state level. the process of decentralization and devolution of re- The policy and thrust of its implementation features should sponsibilities for RWSS to the panchayat raj institu- emphasize the core themes emerging fronn this report: tions, local administrations and users, and by devolution of responsibilities to grass-roots levels and, in strengthening the advisorycapacity of existingsector particular, user involvement and implementation; a de- agencies; mand-oriented approlach; full cost recovery, cost sharing To ensure financial viability and sustainability by and financial sustainability; and progressive adjustment of implementing cost-sharingand cost recoverypolicies; government's role to be a facilitator rather than an and implementor in the RIKSSsector. The policystatement sub- To protectwaterresources,in particular groundwa- sequently needs to be implemented through well identified ter, by developing planning, resource management interventions. The strategy is to ensure a politically,legally and technological practices to protect or improve the and institutionally supportive environment that will advo- availabilityand quality of groundwater for rural wa- cate and facilitate the implementation of policies and en- ter supply. able the reforms to proceed. The strategy relies heavily on the use of central and Four interventions are recommended. First, a wide- state funding to drive the reform process. As such, condi- spread campaign should be launched to communicate the tionality for disbursement of central funds to state admin- message that water is a scarce resource and must be man- istrations and of state funds to panchayat raj institutions aged as an economic good to ensure universal access and and local administrations should be defined explicitly in efficient use and allocation. This campaign will include terms of conditions that must be met and activities for mass media campaigns, public education, and targeted which funding can be applied. The policy needs, strategy training to inform the rural (and urban) population of the considerations, and critical interventions recommended for need to charge for water and the benefits of'doing so, and to convince politicians of the public's willingnessto payfor they are oriented.to consumer service and serve their ma- a safe and reliable supply of water. Matching central fund- jor clients (the panchayat raj institutions, specifically the ing may be provided to support public communication. gram panchayats and their village water supply and sani- Second, groundwater legislation should be developed and tation committees). Second, institutional strengthening implemented to ensure that priority is given to drinking activities should be supported to improve the responsible water and the protection of its source. agencies' functional cap:city in policy development, plan- Third, a state Action Plan should be developed and ning, implementation, operations and maintenance, implemented to devolve responsibilities as defined by the monitoring and evaluation, and health and sanitation pro- Panchayat Raj Act (including rural water supply and sani- motion. Matching central and state funding may be pro- tation).This plan would ensure that decision making,man- vided to support training. Third, a monitoring system agement and financial autonomyare equallydevolved.And should be implemented to ensure that national drinking fourth, activitiesthat strengthen institutions (includingde- water standards are adequately monitored and safe- velopment and implementation of management informa- guarded. Matching central funding may be provided to tion systems, 1,nancial systems, performance-based support water quality monitoring systems. Fourth, own- incentive systems, monitoring and evaluation systems, and ership of rural water supply assets should be transferred management training) are needed to support public sec- to panchayat raj institutions. Matching central and state tor and civil service reform and improve the overall moni- funding may be provided to support rehabilitation and toring, accountability, and transparency ~f the sector. The replacement. Finally, the procedures governing contracts campaign would emphasize the new user and demand-ori- and pre-qualifications need to be improved, as do the pro- ented approach. Matching central funding may be provided cedures for monitoring and evaluating NGOs and the pri- to support state management training and management vate sector. information systems. Cost Recovery and Financial Sustainability Institutional Sustainability Policies are needed at state and national levels to ensure Two policies are needed to support institutional sustain- full recurrent cost recovery, cost sharing and the sector's ability. A national RWSS sector policy is needed to define financial sustainability. At the national level, a RWSS cost the role of the public sector, and a state policy is needed to recovery and cost-sharing policy is needed to define the define the role of the state in keeping with the principles situations in which a community will be eligiblefor match- defined in the national policy. It is essential that these poli- ing government financing for new schemes and rehabilita- cies are not only developed but also implemented. The tion or replacement of existing schemes. At the state level, strategy is to develop and implement a state RWSS decen- a RWSS cost recovery and cost-sharing policy is needed to tralization policy that: (i) clearly defines the mandate and support the principles defined in the national policy. The roles of state, district, and block administrations and strategy has three objectives: (i) to recover the full cost of panchayat raj institutions, with emphasis on the increased operations, maintenance and replacement, (ii) to share role of the usersand a progressivelydiminished role of gov- capital costsso that panchayat raj institutions and the com- ernment to one of facilitator rather than implementor; (ii) munity are partners, capital investment is efficient, and decentralizes sector functions to the lowest appropriate ownership is transferred, and (iii) to encourage rural credit level;(iii) restructures and strengthens the state, district and facilities and the private sector to invest in the sector. The block administrations, to provide support services to proposed strategy will accomplish these goals through the panchayat raj institutions, specificallythe gram panchayats use of well-defined financial conditionalities, whose basis and, most importantly, the village water supply commit- will serve the broader objectives of public administration tees; and (iv) facilitates the participation of NGOs and the reform. Strict adherence to conditionalities will be critical private sector. to the strategy's success. Five interventions are recommended. First, existing Four interventions are recommended. First, a de- public sector institutions should be restructured so that mand-driven approach should be implemented to ensure an affordable supply of public water and sanitation. situations: one, to serve the very poor 01:two, to match Matching central and state funding may be provided to funding for implementing an expensive technology be- support new construction. Second, remedial measures are yond the general affordability of the community that is needed to address drinking water not satisfying national deemed necessary to address serious prolblems of water and state standards, and these measures should be eligible quantity or quality. for matching government financing or transparent subsi- dies. Third, institutional strengthening activities should be The demand-driven approach supported to improve the efficiencyof investment and ex- penditure in the sector and overall financial management A demand-driven approach is essential to promote effi- of sector agencies.Matching central and state funding may cient capital investment and sustain existing investment. be provided to support management and financial man- The institutional interface will be the grain panchayat on agement training. Fourth, tax incentivesshould be provided one side to ensure legal grounding, and on the other a to encourage the participation of NGOs and the private users' (water supply and sanitation) organization to en- sector. Matching central and state funding maybe provided sure users' full participation in decision m~aking.Demand to support soft loans and guarantees. for services will be expressed through the users' willing- ness to organize for RWSS, their willingness to prepare a Transition Phase Gram Plan that includes RWSS, and their willingness to During a transition phase, financial conditionality is pro- share in the capital cost and pay the fulll cost of opera- posed to phase out the existing norm and target-driven tion, maintenance and replacement. Variants within this approach and government subsidies to the sector, and approach can be considered depending on the capacities phase in a demand-driven approach and full cost recov- of panchayat raj institutions and the grass-roots organi- ery. Public education and widespread communication will zations. It is likely that maximum effectiveness will be set the stage for difficult cost sharing and cost recovery achieved where the VWSSCs rather than the panchayat raj policies to be announced and implemented, by convinc- takes a larger implementation role. Decentralization ing the voting public and politicians of the benefits to should not be seen as merely transferring the government them of a financially sustainable service. The goal of the role to local government levels, but as a process of trans- public education campaign will be to enlighten the pub- ferring decision making and irnplementiition to the us- lic about: the process of capturing and delivering potable ers. Institutional sustainability woulcl also be more water; the associated costs; the need to recover those costs expediently assured if it is supported by external devel- from users to ensure and maintain a safe, reliable and ef- opment agencies and with increased participation of ficient service for all; and the need to economize on use NGOs and the private sector. Externally-sypported \ of water to ensure its continued availability in the future. projects should incorporate full policy (elementsof the This would dispel the belief that water is a free resource strategy to bolster GOI's efforts at policy reform. Support from the government of NGO and private sector participation would be facili- The duration of the transition period will depend on tated through increased flexibility in govelnment procure- the ability of sector agencies, district or block adminis- ment and contract regulations and procedures, and trations, and gram panchayats to reorient or restructure through provision of concessional financilng or beneficial themselves, the successful implementation of cost recov- tax incentives. ery and cost-sharing policies, and the general availability Gram panchayats, and/or the user WSS groups, will re- of matching funding. Fundamental to success will be the quire management and other functional training and sup- degree to which these efforts translate into the creation port to enable them to assume their new role as planners, of strong user groups in the form of village water supply implementors and chief caretakers of RWSS facilities. Pub- and sanitation committees (VWSSCs). Once the transi- lic funds should be allocated for this purpose crom existing tion phase is complete, the sector should be fully self-suf- sector commitments to ensure timely a~railabilityof re- ficient. Transparent subsidies will only be provided in two sources.Technical assistanceand training would be required for: enhancing the participatory process; procurement and governments and communities. Where necessary, consult- contracting; operations and maintenance;billing and collec- ants or training institutions should be engaged to provide tion; and financial management and reporting. The staff of training programs for engineers. Water agencies should existing state or district water agencies, NGOs and private support the introduction, communication and facilitation sector organizations would be the agents for dissemination of methodologies for community-based planning, imple- and training to the panchayats. mentation and operations and maintenance of RWSS at District and blocklevel administrations will also require district, block and WSSC/gram panchayat levels. These support for strengthening management capacityparticularly would include rapid rural appraisals,participatory rural ap- in the areasof:management information systems, and finan- praisals, community self-surveys, cost sharing approaches cial and performance monitoring and evaluation systems to and mechanisms, payment systems, training of user groups improve overall sector management, accountability and in contract management, and training of local mechanics. transparency. Development of human interaction and par- ticipatory skills would be critical. This would be especially Key Steps to Implementation important in locationswith no or weakNGOs or private sec- The first step will be for the gram panchayat, users, the tor capacity. As the utility of such skills are cross sectoral, state water agency, and an independent entity such as a care should be taken to avoid replication of skills that may consultant, to compile an inventory of WSS assets. Exist- be present in other government departments. Where avail- ing assets in good operating condition will be transferred able, staff from departments such as health, family welfare immediately to the appropriate panchayat raj institution. or social welfare as well as other personnel (such as exten- The panchayat will own new schemes from the outset and, sion workers,blockdevelopmentofficers,universities,NGOs, through its village water supply and sanitation commit- private firms) should be involved. tee (WSSC), will have full responsibility for manage- District and block engineering sub-divisionsshould be ment, financial management, operations and proactive during the transition phase in assisting the gram maintenance, rehabilitation, replacement, and augmenta- panchayatsto establish watersupplyand sanitation commit- tion or expansion. With these new ownership roles and tees and to undertake participatory inventories of RWSS as- responsibility for the facilities, local agencies would then sets. They should also provide technical services to Gram be free to determine operational and management ar- Plan preparation, preparation of technologicaloptions and rangements in-house or by choosing among existing sec- cost estimates, detailing of cost sharing arrangements, su- tor agencies, NGOs or the private sector for support pervisinggeophysicalinvestigationsand scheme implemen- services or as partners. For schemes in need of repair and tation, and coordinatinghealth and hygieneeducation. rehabilitation, the gram panchayat and/or VWSSC will State-levelRWSS agencieswould also require major re- negotiate with the water agency based on the outcome of orientation toward a demand-driven, client-oriented and the participatory inventory taken. For large regional or participatory culture and establishing themselves as facili- small-town piped water supply and sanitation schemes tators to the panchayats and user WSS groups. This would (which represent 1percent of all RWSS schemes and ser- be especiallycritical where such agencies had responsibil- vice 15 percent of the rural population covered by public ity for regional piped schemes, to ensure the levels and facilities) the state and district level administrations or quality of service that users desire and are willing to pay sector agenciesshould be responsible for planning, imple- for. Community specialists or sociologists should be em- mentation and operation and maintenance. ployed at managerial level by the agencies, with mandate Particularly important, a users' water supply and sani- to administer staff training programs in local government tation committee (WSSC)should be established at scheme, procedures and community participation techniques, village or panchayat level to be the main body for planning and to develop approaches for providing services to local and managing RWSS.' The dual organizational structure of 7Thenumber of water supply and sanitation committees (WSSC) per community will depend on population size, social structure of the community, and the community's perceivedneed to organize.The WSSC can be newly constituted under the gram panchayat,or its functions relegated by the gram panchayatto an existing voluntary organiza- tion through appropriateby-laws. The establishment of the committee would be a precondition for access to central or state government financial assistance. WSSC and gram panchayat is suggested to provide the flex- ning and developing watersheds. It will also incorporate the ibility needed to accommodate the varying local conditions sanitation requirements of public institutions such as across India. The gram sabha will be summoned, and a staff schools, public health centers, and anganwadi (preschool) member of the water agency at the district or block level, or centers within the gram panchayat. an NGO or private consultant, will present the options along Cost-sharing principles and financing arrangements with their positive and negative aspects. A schedule for or- should be clear to all and agreed on early. Preliminary de- ganizing the village WSSC will be agreed and followed. Ad- sign and estimates of the capital investment costs, the equate time must be allowed for this process, which means 0&M costs, and the replacement costs will be prepared that no conditionalities should be tied to a time frame for for each feasible option. This will include both construc- completing the inventory. tion of new schemes and rehabilitation and replacement The village water supply and sanitation committee will of existing schemes. The ultimate choice of option will prepare a Gram Plan encompassing all public water and sani- be based on the users' explicit understanding of the an- tation services to be provided by or within the jurisdiction ticipated benefits or service levels, their share of the ini- of the gram panchayat. The Gram Plan will assess the needs tial investment costs, and the implications of full cost and demands expressed by different social groups within the recovery in the long run. villages and habitations of the gram panchayat, provide all Based on the preliminary designs and cost estimates, stakeholders with information, ensure that water supply is the village water supply committee and gram panchayat integrated with environmental as well as household sanita- will determine the feasibility of implementing the desired tion, facilitate the transfer of ownership of existing RWSS plan. Amendments and changes will be made and a final assetsfrom the state agency to the gram panchayat (if appli- plan produced. The state and central adm~~nistrationswill cable), and provide a basis for assessing the eligibility for provide matching funds as a proportion of the estimated matching financing from the gram panchayat, state and cen- cost of a basic level of service up to a ceiling determined tral levels. by the state. Separate principles will be determined for The villageWSSC, with the community and users, will sharing the expenses for latrines in schools, public health prepare and implement the water Gram Plan. Technical centers and community centers. Based on the final Gram and organizational guidance and support can be obtained Plan, a board comprising block and district development from block or district administrations, sector agencies, committees as well as representatives from the state wa- NGOs or private firms as desired. Simple formats and ter agency, will assess eligibility for support. The agreed guidelines for assessing the condition of public facilities plan will be implemented. will be provided by block or district administrations or For household sanitation, comprising mainly latrines, sector agencies with appropriate guidance from state agen- the demand-driven approach will rely on ;a social market- cies. These formats and guidelines will provide a uniform ing strategy, where government funds are used to create de- basis for assessing the eligibility for matching financing mand through a public awareness and education campaign, throughout the state. to strengthen private sector delivery mechanisms, and to The Gram Plan will include a map of each village and support development of a range of appropiriate and afford- habitation that delineates service areas, existing sources and able technologies. The approach will include: (i) demon- water points, waterlogged or water-prone areas, areas with stration programs that incorporate approbaches that have specific environmental sanitation requirements, and com- been tested, such as the UNICEF sanitary marts program peting uses of groundwater. Mapping is essential because that target whole villages and habitations (not individual it provides basic information for broad planning and de- households), which have been selected for their demonstra- velopment, allows anticipated population and economic tion potential, and that recruit representatives of NGOs, growth to be taken into account, and enables basic services youth clubs, and other local organizations in addition to to be integrated at the village level.The Gram Plan will take community health guides and male and female health into account the requirements for drinking water, compet- workers; (ii) alternative delivery systems, such as a network ing uses of water, and recharge measures necessary for plan- of production centers, retail outlets for sanitation products, Table 4.1. Framework for Decentralization of RWSS Functional Responsibilities Mini and small piped Environmental Regional or town Functional responsibility Hand pumps water supply sanitation piped water supply Policy State State State State Planning Village water supply WSSC. Gram WSSC, Gram WSSCs, Block, committee (WSSC) panchayat,block or panchayat,block or district and state and gram panchayat district district, and state Implementation WSSC. Gram WSSC, Gram WSSC, Gram Block, district and panchayat, block or panchayat,block or panchayat,block or state district district district Operations and maintenance WSSC. Gram WSSC, Gram WSSC, Gram panchayat,block or panchayat,block or panchayat,block or Block, district and district district district state Monitoring and evaluation WSSC, Gram Grampanchayat, WSSC, Gram Block district and panchayat,block or block or district, panchayat,block or state district state district, and state and training of local masons, that are supported by grants, past public sector and supply-driven approach oriented soft loans or tax incentives; and (iii) a range of low-cost to to construction and lacking institutional and financial more-expensive latrines that are available on the market. sustainability, to a user and demand-driven approach with Central and state funding should be clearly earmarked to emphasis on customer service, community participation encourage NGOs to establish initial facilities, and well-de- and sustainable operations and maintenance. fined performance indicators should be developed for monitoring these campaigns and programs. Incentives for Reform The incentives and disincentives for stakeholders to accept Decentralization of Functional Roles and participate actively in the reform process are of para- Substantial institutional reforms, bolstered by strong po- mount importance. Table 4.2 lists incentives and disincen- litical support, are clearly required. To reorient the struc- tives for the different stakeholders. Clearly, what is an ture and functioning of RWSS agencies, functional roles incentive for some can be a disincentive for others. The rec- will have to be decentralized to the lowest appropriate level ommended interventions try to address these conflicts. as detailed in Table 4.1. Functional roles and responsibili- ties must be defined, restrictive sanctioning limits for each Cost Recovery and Financial Sustainability level must be reviewed and changed, and institutional space Cost recovery of capital and recurrent e x p e n d i t a s must be created to encourage NGOs and the private sector through user fees is a critical action for financial sustain- to participate. ability of the service. Cost-reflective tariffs would induce As Figure 4.1 illustrates, only sector agencies that re- more realistic service expectations from users and a more structure or reorient themselves appropriately will be able affordable pipeline of investments from the service pro- to provide the services that users and communities de- vider. Furthermore, local administrations would be enabled sire and are willing to pay for. A new organizational equi- to properly maintain assetsand sustain servicelevels. Where librium is necessary for their long-term sustainability, the cost of the least-cost technology alternative generally both as important partners and as competitors in the exceeds the affordability of an individual community, pay- RWSS sector. The new organizational structures will en- ment in-kind or a direct and transparent subsidy should able the new priorities that are required: a shift from the be explored. Where widespread economic disparities are found,cross-subsidization may be an appropriate and prac- all involved parties equal partners. The proposed cost-shar- tical option. A progressivetariff with different pricing tiers ing framework is presented in Table 4.3. for different uses and different classes of customers can be In order to accomplish the objectives of the transition considered. A well-designed tariff structure could support phase,cost sharing conditionality is fundamental to the en- cross-subsidization from one region to another, from ur- tire strategy. Cost sharing will provide an opportunity to: (i) ban to rural areas, from one class of user to another, or from extendservicecoverageand make the best use of limited cen- high consumption to low. tral and stategovernment resources; (ii) use central and state The strategy here calls for full cost recovery of opera- funds to induce capacity building toward gIeater client-re- tions and maintenance expenditures, and a gradual move sponsiveness; (iii) use central and state f~indsto induce toward recoveryof capitaland replacementcosts. In the long implementation of a participatory planning process; (iv) run all costs, including for capital and replacement, will be engage users and communities in the processto demand af- fully recovered. During the transition phase, responsibility fordable assetsand services;and (v)encourage management for 50 percent of the capital investment cost will be shifted responsibility, efficiency in procurement ar~dinvestments, from central and state governments to the panchayat raj in- and sustainability of operations and the infrastructure. stitutions and users. Apre-defined proportion of the capital The proposed cost-sharing formula is financially fea- investment cost will be recovered from users, serving as a sible and, if properly implemented, will enable the transi- financial conditionality for central and state government tion phase to be implemented over a five to seven year time matching capital investment. As an equitable compromise frame. Current central and state allocations to the sector between the old and new strategies, a nominal 10 percent are sufficient to provide matching funding, to achieve full share user contribution is proposed for any new schemes coverage based on existing norms and curIent population identified for construction during the Gram Plan process. levels, to repair and rehabilitate existing sctiemes to facili- For rehabilitation or replacement of existing systems, a 25 tate transfer of ownership, and to undertake the proposed percent share contribution from users is proposed, making institutional strengthening activities. Under this proposal, Figure 4.1. ChangingPriorities of SectorAgencies Changing Priorities & Customer Service Table 4.2. StakeholderIncentivesand Disincentives and Proposed Interventions Stakeholder Incentives Disincentives Recommendedinterventions Users,WSSCs and Control over the Need to pay for services Training and support offered to W S C s Gram panchayats timing, location,and Responsibilityfor operations and gram panchayats,in developing Gram type of scheme and maintenance Plans that includes RWSS More reliable and Responsibilityfor schemes A participatory inventory and asset better quality services that were designed without evaluation with third-party review user participation and may before transfer of ownership and not satisfy user and community responsibility needs Matchingcentral funds available for eligible new construction and rehabilitation or replacement * Management autonomy to set tariffs and procure goods and services from the supplier of their choice and at prices they are willing to pay State agencies and More efficient capital Lack of political support Central policy framework as precedence district administrations investment Financial conditionality Central matchingfundingfor institu- Potentially reduced Difficulty in effectinginstitu- tional reform and strengthening subsidy to the sector tional reform and adjusting Public education and mass communi- Increasedpublic satis- staff levels and mix as cation to inform the public and gain faction with sector necessary political support services Cost of institutional strength- Matchingcentral fundingfor public ening activities and software education support Rajiv Gandhi Mission to monitor and support the reform process Central government More efficient capital None Financial conditionality investment Potential reduction in subsidy to the sector lncreasedpublic satis- faction with sector services Sector policy objectives met NGOs and the private Potential for increased Unreceptive and inflexible Improved and more flexible government sector involvement in supply government procurement and procurement and contracts of RWSS goods and contracts Financialincentives-loan guarantees, services More smaller customers loans on preferential terms, and tax Potential for increased (gram panchayats and user incentives-toencourage new entrants involvement in RWSS groups) rather than central to the sector planning, implementa- or state agencies tion. O&M Absence of viable working Potential for increased network for distribution of involvement in partici- goods and service patory Gram Plan preparation Potential for involve- ment in providing insti- tutional strengthening and training support Table 43. Cost-SharingFramework (percent) Proposed share formula Proposed share fol-mulafor Current situation for new construction rehabilitation & rec~lacement Users 10 25 Panchayatraj institutions 40 25 State administration 60 25 25 eentral administration 40 25 25 Table 4.4. Matching Grants as a Percentage ofTotal LocalAdministration Revenue, 1996-97 Local Local Annual capital administration's 40% administration Matchinggrant as cost per capita W S S expenditureshare total revenue per a percentageof Technology (rupees)* per capita(rupees) capita(rupees)** total revenue Hand pumps 80 32 735 4 Mini piped water systems 100 40 735 5 Small piped water systems 150 60 735 8 Regional piped water systems 167 67 735 9 Town piped water systems 175 70 735 9 * Capital cost per capita and proposed financing period (hand pumps.2 years;mini piped water systems. 5 years;small piped water systems, I0 years;regional piped water systems. 15 years:and town piped water systems. 20 years). "17 percent of projected 1996-97 central government total expenditure I projected 1996 total population. the central and state administrations will provide match- an adequate level of resources to fulfill their responsibilities. ing funding for 50 percent of the capital investment needed Local administrations round the world typically spend be- during the transition period. This would amount to be- tween 15 and 20 percent of total expenditure on basic water tween Rs. 85 billion (US$2.4 billion) and Rs. 100 billion supply and sanitation services. As Tablle 4.4 illustrates, the (US$2.9 billion) over a period of 5-7 years which, given proposed cost-sharing formula for India is well within in- the government's current annual allocation of Rs. 16 bil- ternational norms. lion (US$457 million) to Rs. 18 billion (US$514 million), Local administrations should be apportioned a de- would be feasible within the transition phase. fined share of central and state taxes and be encouraged With central and state government matching funds and to improve their level of self-generated income. State fi- self-generatedfunds, the level of local administration expen- nance commissions should clearly d~efinethe type and diture would equal roughly 13-17 percent of total govern- level of taxes or fees that local administrations may levy ment e~penditure.~This expenditure level is common in and offer policy guidelines. Local administrations should developing countries and more importantly, would be a ma- also be encouraged to explore external sources where ad- jor step toward ensuring that panchayat raj institutions and ditional funding is justified. An assessment of credit-wor- local administrations have sufficientfinancialautonomy and thiness and the financial feasibility of the undertaking will 'Assuming that the current level of local administration expendimre ranges from 2.9 percent of total government expenditure (based on 1986-87 expenditure levels) to the optimistic estimate of 6.6 percent (based on 1989-90 expenditure levels), and further assuming that the recommendations of both the Tenth Finance Commission and the West Bengal State Finance Committee are implemented nationally. Central transfer help to sustain the activity.Assistance in the form of credit These recommendations are already the subject of en- guarantees and preferential rates may be necessary to fa- couraging follow-up by the central government, a num- cilitate the process. Linkages with parastatal credit facili- ber of states, bilateral and multilateral agencies and NGOs. ties should be established. Table 4.5 illustrates the existing Subsequent to initial discussion cum dissemination at a structure of state and local administration financing and national workshop in February 19979of an earlier draft presents the proposed situation. of this report, and report revisions to incorporate the out- come of the national workshop, further workshops at re- Proposed plan of action gional and state are being organized by the RGNDWM to disseminate the final strategy recommendations as re- In line with the recommended strategy, the following Plan flected in this report. The recommendations are also be- of Action reflected in the Matrix of Recommendations ing incorporated at project level in some states, in the (Table 4.6) addresses each of the critical goals. The Action design of projects supported by the World Bank, and in Plan summarizes the actions discussed in this chapter and various bilateral agency and NGO-supported activities. various detailed recommendations also contained in Chap- There is now a need to broaden implementation to a for- ters I1 and 111.It also assigns responsibility as required to mal national strategy that encompasses all elements of the users, appropriate government level or the private sector, report in a comprehensive approach. This sector reform and proposes a time frame for action. The time frame has process is under energetic initiation by GO1 and merits been classified as urgent (0-2 years),short term (1-3 years), full support to achieve the intended turnaround in sec- medium term (3-5 years) and long term (>5years). tor performance. 'The national workshopon RWSS,held on February 20-21, 1997, was chaired by the Rajiv Gandhi National DrinkingWater Mission. Proceedingsof the workshop,including speech deliveredby the Rural Development Secretary,Mr.Vinay Shankar,are reproduced in the Annexes. Table 4.6. Detailed Matrix of Recommendations Recommendation Responsibility Time frame A. EstablishAn EnablingEnvironment 0bjective:Toensure apolitically,legally and institutionally supportive environment that will facilitate the implementation of the reform process with particular emphasis on devolution of responsibilitiesto grass-roots levels and,in particular,user implementation,a demand-oriented approach, full cost recovery and financial sustainability (also refer Sections B & C below). A.I. PublicAwareness:Implement a widespreadpublic awareness Central and state Governments Urgent campaign on the scarcity value of water to convince voters and politicians of the need to: (i) levy water charges on those users in proportion to benefit received (industry,farmers,large consumers);(ii) ensure sufficient resources to maintain investment and assure an adequate level of service for all; (iii)limit relianceon limited government funding; and (iv) eliminate subsidies for water supply (with possible transparent targeted subsidies for impoverished groups) A.Z. Give Priority to DrinkingWater inwaterResourceUse: Central and State Governments Short term Amend the NationalWater Policy, formulate state water policies,and prepare groundwater legislation,to give clear priority to drinking water over other uses. A.3. Redefine andReduce Government Role:Develop and implement Central and State Urgent national and state policies definingthe role of each administrative level of the public sector in the RWSS sector, includingpolicy on cost recovery, elimination of latrine subsidies, the level of commitment for initial service coverage,rehabilitation and replacement, expansion,and O&M. A.4. Full Cost RecoveryandCapital Cost Sharing:lmplement Central and State O&M cost recovery and cost sharingpolicies for demand-ledinvestment in the RWSS sector, defining eligibility criteria for provision of matching government funds to communities for new schemes and rehabilitation or replacement of existing schemes. A.5. Decentralization ofRespomibilities:Devolve management State Short term responsibilities and resources to the panchayats andVWSSCs, with appropriate authority and incentive to generate their own revenues. A.6. Institutional Strengthening:lmplement institution strengthening State Short term activities (including developmentof managementinformation systems, financial systems,monitoring and evaluation systems),management training to directly facilitate decentralization to district and block levels as appropriate,and civil service reforins necessary to ensure the sustainabilityof the former. B. Ensure Institutional Sustainability Objective:Implement a state RWSS decentralization strategy empha- State Short term sizing a user-driven demand-orientedapproach, maximizingthe role of users in decision making and implementation,and shiftinggovernment's role to one of facilitator rather than serviceprovider,by: clearly defining the mandate and roles of users as well as state, district. and block levels; decentralizingfunctions to the lowest level appropriate;reorienting district and block administrations to support the gram panchayats andVWSSCs; & facilitatingparticipation of NGOs and the private sector. lead in RWSS decision making: Panchayat andVWSSCs Establish village water supply and sanitation committees (VWSSCs) associated with under the gram panchayats; HaveVWSSCs and gram panchayats prepare an inventory of all public water supply and sanitation assets within the gram panchayat (as part of the HaveVWSSCs and gram panchayats assess the condition of all assets in accordance with issued standards,with assistance provided by the block and district administration; HaveVWSSCs and gram panchayatsprepare cost estimates to rehabilitate o r replace public water supply and sanitation assets to achieve the service levels designed and comply with issued cost standards, with assistance provided by the block and district admintstrations; Transfer ownership of existing assets t o the panchayat raj institutions. which will make a formal commitment to provide matching funding for rehabilitation or replacement of existing schemes in accordance with the Gram Plan: 25 percent by local administrations. 25 percent from state agencies, and 25 percent from central agencies; HaveVWSSCs along with the gram panchayats prioritize works, in line with availablefunding(25 percent mast be raised from user contributions and the gram panchayat's own resources); Have district and local administrations andVWSSCs prepare a Gram Plan for water supply identifying not covered and partially covered areas as well as water quality, rehabilitation and replacement, augmentation and environmental sanitation needs; Undertake a participatory validation of not covered and partially covered habitations (taking into account private sources). B.Z. Enable,promoteand facilitateparticipationof NGOs and the private sector;define appropriate roles of these non-government as well as external agencies: Prepare an inventory of registered and qualified NGOs for panchayat raj State and District institutions and sector agencies and revise current government regulations t o allow panchayat raj institutions and sector agencies t o recruit NGOs; Provide private sector preferential financing t o encourage private sector Central and State involvement in RWSS delivery. support and O&M services; Allow block and district engineering departments. NGOs, and the private State sector to provide maintenance and repair services on a (cost reflective) contract basis t o the responsible local adm~nistration; Have external support agencies focus on supporting institutional reform Central and External Support Urgent of the water agencies necessary t o support and consolidate the de- Agencies centralization process as well as consolidate the coverage already achieved. I Table 4.6. (cont.)~etriledMatrix of Recommendations Recommendation Responsibility Time frame B. (cont.) Ensure Institutional Sustainability 8.3. Strengtheninstitutionalcapabilitiesin consumer orientation, State Llrgent,Short term policy development,planning, implementation, O&M, monitoring and evaluation, and promotion of health and sanitation: Develop participatory guidelines and manuals for planning; recruit, Slhort term transfer and train staff within existing cadres to strengthen capabilities. supplementingthem with NGOs & private consultants; I Offer training to staff in design and supervision. Mediumterm IB.4. Restructurepublic sector institutions. State Slhort to long term B.5. Strengthen operational guidelinesand proceduresfor RWSS agencies: Develop standard operations and maintenanceprocedures and State Slhort term communicate them to the responsiblelocal administrations; Improve design and specifications to reflect the field situation and State Pledium term make programs responsive to user needs; Update approval and sanctioningprocedures to fit the decentralized State Slhort term roles and responsibilities (more sanctioningpowers to lower levels); I Strengthenpre-qualification criteria so that only qualifiedsuppliers, State Pledium term consultants, contractors, and NGOs are involved; Implement transparent procurement procedures that consider quality State Slhort term as well as cost criteria Improve quality control through formal procedures and guidelinesand State Llrgent provide opportunities to conduct independent quality audits and involve local communities (users) in site supervision; Develop and implement a monitoring and evaluationsystem with Central and State indicators also covering activities other than physical implementation. * Development and implement a system ensuringthat national drinking Central and State Sliort to medium water standards are adequately monitored and adhered to. term C. Ensure Financialviability and Sustainability Objective:lmplement full cost recovery of operations and maintenance and replacement costs to ensure sustainabilityof sector investment. Imple- ment a demand-driven, cost-sharingapproach ensuringthat the panchayat raj institutions andVWSSCs are partners to make capital investment more efficient and transfer ownership.Encourage sector financing by rural credit facilities and private sector investors. Table 4.6. (cont.) Detailed Matrix of Recommendations Recommendation Responsibility Time frame C. (cont.) Ensure Financial Viability and Sustainability C.1 implement a demand-driven approach: . HaveVWSSCsand gram panchayats,assisted by block and district admin- VillageWater Supply and Urgent to short istrations,prepare preliminary design and cost estimates for alternative Sanitation Committees, Gram term public water supply and sanitation schemes,combiningthe least-cost Panchayats, and the State technology and the minimum service level to constitute the least-cost option that will be used to determine the level of matchingfunding; Have village water supply committees and gram panchayats choose the level of service they wish and raise sufficient fundingfor the full incre- mental cost; Have village water supply committees and gram panchayats prioritize works eligiblefor matchinggrants in accordance with available funding (a total of 50 percent,of which 40 percent must be raised from the gram panchayat's own resources and 10 percent from user contributions). C.2. Increase user charges t o fully recover O&M costs: State, District and Panchayats Urgent lncrease water charges and bulk water prices to fully recover O&M cost (as well as cover replacement costs); Improve assessment and collection procedures; lntroduce indexing mechanisms to automaticallyadjust water charges to inflation and cost increases. C.3. Reduce O&M costs: State, District and Panchayats Short to medium term Transfer O&M responsibilitiesto local bodies (panchayats institutions) and theirVWSSCs; Encourage participation of local operators and contractors; Use local materials and labor; Reduce overhead components of O&M activities. C.4. introduce and implement capital cost sharing policy: Central, State, Panchayats Short term For new schemes,implement capital cost sharing cf 10%by users,40% by panchayats,and 25%each by central and state governments; For scheme rehabilitation and replacement,implement capital cost sharing of 25%each by users,panchayats, central and state governments. C.5.Make RWSS agencies financially self-sufficient and strengthen State. District and Panchayats Short to medium their capabilities i n financial management: term Allow RWSS agencies to retain proceeds from water chargelprice; Fully fund 0&M and other recurrent expendituresfrom revenues; Provideaccess to RWSS agencies to receivetraining in financial management; * Minimize recourse to stateTreasury; Facilitate access to additional sourcesof revenue for panchayats and other RWSS agencies. Table 4.6. (cont.) Detailed Matrix of Recommendations Recommendation Responsibility Time frame C. (cont.) Ensure FinancialViability and Sustainability C.6. Re-prioritize Public Expenditures in RWSS: State,District. Panchayats Urgent Give top priority to adequate O&M funding; Give high priority to institutional capacity enhancement,including investmentslexpenditures to make systems more user-responsiveand performance-oriented. ' C.7. Implement effective accountingand auditing procedures, billing State Urgent to short and collection systems, standard financial reporting formats, and simple but term well-defined financial management and accountingsystems. C.8. Amend existinglegislation and regulations so that panchayat raj State Medium term institutions are legally entitled to enter into financing and loan agreements with government-sponsoredrural credit facilities or private sector financial institutions. C.9. Establish a system for providing loan guarantees by the block State Medium term and district panchayat raj institutions or the state, as necessary. Objective: Implement measures to assure priorityusage of water resources to drinking water and to protect the quality and sustainability of groundwater resources. D. I.Define appropriate remedial measures t o address water Central Short term quality problems. D.2. Design a strategy for developing water supply schemes in Central Short term areas with water quality problems that meet safe drinking water requirements and acceptability (preference) of users. D.3. Develop technology options for solving water quality problems Central Short term (fluoride, iron and arsenic) both at village and household level as well as for larger piped schemes. D.4. Develop groundwater legislation and regulations, and develop State Short to medium regulators' capabilities to manage and protect groundwater resources. term D.5. Develop institutional capabilities for multi-sectoral water State Short to medium allocation,planningand management,includingfeatures to prioritize term allocation for drinking water and protectionlmitigation against pollution (refer GOI-World Bank, 1998). ANNEX 1 Kev documents from the w;rkshop on RuralWater Supplyand SanitationStrategy, February 1997 I. Program 2. welcome speech by M~VinayShankar,Secretary,Ministry of RuralAreas and Employment, GOI 3. Recommendationsfrom the four workinggroups: Group 1: Policy Issues-FinancialViability, Cost Recovery Group 2: The Institutional Framework:Sector and Community Institutions- NGOs Group 3: Institutional Framework-Service Delivery Group 4: Water Resources-Water Collection-TechnologyOptions WATER RESOURCE MANAGEMENT STUDY World Bank/Government of India WORKSHOP ON RURAL WATER SUPPLY XND SANITATION STUTEGY February 20-21,1997 Venue : Central SoiI & Materials Research Station (CS3IRS) Olof Palme Marg, Hauz Khas, New DeIhi PROGRAMME 20 February 1997 Registration Welcome address by Secretary MRA&E Introductoq remarks Mr Keith:OblitauMs Christina Wood, World Bank - Presentation of Drafi Report- Mr. V Rehoej and Team (Consultants) (I5mins for each of the four major thema in the repon) Policy Issues-Financial Viability Con recovery - Insrirutional framework Sector and Community Instirutions NGOs - - Institutional framework Service Delivery. - Water ~esources Water Collecrion Technology Options. - - Tea Plenary Discussion Views of other _eovernmentascncies - Ministr). of Water Resources - Ministry of Urban Affairs & Emplo~ment - hlinistry of Health - Planning Commission Group Formation Lunch 4 Working Sroup session on the major themes (brief presentation by selected persondConsultants on the four selected themes in the tvorking groups followed by the sessions) Tea Working group session and finalisation of group repons 0830 Presenntion of nvo working groups in the Plenary follo~vedby discussion 1000 Tea 1015 Presentation of nvo working groups in the Plenary follo\ved by discussion 1145 Tea 1200 Plenary discussion & Concluding remark and closing speech 1330 Lunch D R A F T l'&LCOM ,4DDRfsS %ySECRETARY (RURAL DElhZLOfMEhiT) ON THE OCCASION OF WOPU %ANK/GO\/EP,NMENTO f tNDIA \~OQ,KSHOP OK RURAL IVATEP,SUPPLY AND SAN1T44T1ONSTRRTEGIES ON 20"FEBRUARY, 1997 -0-0-0-0- It is a great pleasure to be with all of you on the occasion of National Workshop on Rural Water Supply and Sanitation Strategy organised jointly by the Government of India and the World Bank. As we are in the process of finalising strategies and policies for the 9IhPlan, this Workshop has a special significance. India has achieved considerabIe success in providing safe drinking water to about 85% of popuIation by tapping ground and surface water through 3 xnillion handpumps, thousands of water supply schemes and traditional sources. The Government of India is committed to provide 'safe drinking water faciIities to ;a11Not Covered and Poorly Covered habitations within next two years and enhance water availability level to the national norm of 40 lpcd to all the Partially Covered habitations by 2000 AD. Despite, impressive coverage of provision of safe drinking water facilities in the rural areas, there are areas of serious concern. The Government provided water suppIy programmes, without the active participation of the stakeholders,, have created expectation that water is a free commodity and the functionality of the installations is a Government responsibility. This approach discouragr:~ the development of more efficient and lower cost options for service delivery anti deny the opportunity to the users to exercise their power as consumers to demand a better service. The re-emergence of a large number of not covered and poorly crwered habitations is due to government driven operation and maintenance practices. In future the rural water supply programme will face substantivechallenges in terms of meeting the expanding needs of a growing population, as well as the increasing demand of the population for higher service levels. The Working Group for the gthFive Year Plan for rural water supply and sanitation programme assessed the requirement of a staggering amount of Rs. 40,000 crore keeping in view the measures to be undertaken to sustain the water supply and sanitation services. In the context of resource constraints and competing demand on resources and priorities, it is unlikely that the Government alone would be in a position to mobilise the above required funds in a period of 5 years during the-9" Plan period. Given the circumstances, cost sharing by concerned institutions right from the users, Panchayati Raj Institutions, the State Government and the Central Government has to be exprored. The cost sharing arrangement would ensure involvement of the users and the supporting agencies like Panchayati Raj Institutions to own, operate and manage the drinking water supply systems. The problem of cost recovery and sustainability is controversial, but in the midst of the of the controversy there is significant consensus. Few would deny that current approaches are inadequately contributing to sustainability sector development. The resources which are available to the sector must be used to the b u t possible effect, and all available resources, including those in communities, must be mobilised. Much of the argument is over methods and approaches of development. In this background, I appreciate that the Workshop rightly recognise . key 2 policy issues of financial viability aad cost recovery, institutional sector reforms to translate policies into implementable programmes and technology options to :;upport such approaches to provide cost effective Rural Water Supply systems to the rural communities. Major shifts and emphasis on policy towards greater cost recovery through user financingmay mean radical restructuring within the sector itself. In many cases, fundamental changes may be required in the reIations between the communities, Panchayati Raj Institutions and sector institutions like Public Health-Engineering Departments. There is a need to estabIish an enabling environment to convince a/] concerned to facilitate implementation of necessary policy changes to advance the sector reform process. I understand' that promising signals emanates from the pilot experimems involving community participation with cost sharing instruments. There is a need to nurture these pilot experiments with care sp that these projects serve as visible demonstration entities to convince all concerned about the desirability of embarking on poIicy shift from supply driven approach to demand driven approach. . 73"' amendment of Constitution provides an opportunity to involve and empower Panchayati Raj Institutions with adequate technical, financial and managerial powers to own and manage the systems. While 73damendment provides an institutional b e w o r k for sector reforms, additional steps are required tco make them hctional through concomitant devolution of finances. The State Government and the State Finance Commission needs to be convinced in order to cleveIop principles to ensure the devolution of proportionate level of financial resourceasto the Panchayati Raj Institutions and provide them with sufficient incentive and latitude to increase their own resources to enable them to discharge their responsibilities. The Workshop rightly identified water technology option as a key issue for deliberation. As ground water source supports 85% of the drinking water systems, evolving suitable technology options will be of great relevance in the context of depletion of ground water level and deterioration of ground water quality. Conservation of water, recharge of acquifers by adopting micro watershed approach in co-ordination with Central Ground Water Board and other concerned Departments, promotion of site specific water harvesting structures, enactment of a suitable Iegislation on the lines of the Mode1 Bill circulated by the Ministry of Water Resources and the Maharashtra Ground Water(Regu1ation for Drinking Water Purposes) Act, 1993 to reguIate and control exploitation of groundwater, particuIarIy in grey, dark and over-exploited zones are some of the important measures for ensuring suitability of drinking water sources. Water quaIity issues are increasingly gaining recognition by sector agencies across the country. In the growing depletion of ground water sources, the development of agricultural and industria1 activities aggravate the' water quality problems in some of the areas. There is a need to put in place an effective water quaIity control, monitoring and surveillance systems and remedial instruments to ensure provision of safe water. I am sure this National Workshop, with its congregation of knowledge and expertise and with the political leadership given by the Centre and State Governments for assuring the basic minimum services before the turn of the century, will make a significant contribution to the solution of varied problems associated with drinking water and sanitation for our people. I wish the National Workshop every success and hope Ithat the recommendations from the Workshop will get translated into national and state policies and concrete action plans for implementation within a fixed time frame. -0-0-0- MfORKING GROUP I : POLICY ISSUES FINANCIALVIABILIW, - conRECOVERY MAIN CONSTRAINTSPROBLEMS 1. SUPPLY DRIVEN APPROACH 2. LACK OF COMMUNITY PARTICIPATIONANVOLVEMENTIN PLANNING, EXECUTION AND O&M 3. NO COST RECOVERY REMEDIAL MEASURES 1. FOR MAKINGTHE PROCESS DEMAND DRIVEN, 10% CAPITAL COST CONTRIBUTION SHOULD BE OBTAINED UPFRONT IF NECESSARY PRIs CAN OBTAIN LOAN IN EXCEPTIONAL CASES, A TRANSPARENT SUBSIDY FOR THE CAPITAL COST CONTRIBUTION MAY BE GIVEN 2. 1% OF THE'OUTLAY ('TOBE RAISED TO 5% OVERTIME) IN RWSS SECTOR SHOULD BE EARMARKED FOR: - IEC -- AWARENESS PUBLIC EDUCATION CREATION - HEALTH EDUCATION - HRD ACTIVITIES 3. SCHEMESSHOULD BE HANDED OVER TO PRIs - WITHIN ONE YEAR FOR SPOT SOURCES - WITHIN TWO YEARS FOR PIPED WATER SUPPLY SCHEMES PRIs SHOULD BE FREE TO SETTARIFF FOR FULL COST RECOVERY'OF O&M AND CAPITAL COST CONTRIBUTION PRIs SHOULD BE STRENGIHDED ORGANSATIONALLY AND FINANCIALLY SUBSIDIES TO BE PHASED OUT OVER THE TRANSITION PERIOD WORMING GROUP I - PQLICY ISSUES FINANCIAL VIABILITY, COST RECOVERY - 1. WATER IS A SCARCE RESOURCE .AND HENCE NEEDS TO BE MANAGED .4S AN ECONOMIC GOOD 2. PARADIGM SHIFT FROM SUPPLY DRIVEN TO DEMAND DRIVEN APPROACH RECOMMENDATIONS 10% CAPITAL COST CONTRIBUTION SHOULD BE MADE BY USEWGP IF NECESSARY GP MAY OBTAIN LOAN FROM FINANCIAL INS'HTl..lTIONS SUCH AS LIC, HUDCO, NABARD AND IFC - INFRASTRUCTURE FINANCING SHOULD BE INCREASED AFfER THE TRANSITION PHASE THIS SHOULD BE INCREASED GRADUALLY TO 50% IN DIFFICULT SITUATIONS THE TRANSPARENT SUBSIDY CAN BE GIVEN TO COVEX CAPITAL COST CONTRIBUTION WHERE M O E THAN 55 LPCD IS DEMANDED 50% OF THE INCEMIENTAL COST SHOULD BE RECOVERED SIMILAR APPROACH SHOULD BE ADOPTED IN THE CASE OF URBAN LOCAL BODIES WHERE NO CAPITAL COST CONTRIBUTION IS RECOVERD AT THE FINAL STAGE OF DESIGN OF SCHEMES, PRIs, NGOs, VWC SHOULD BE INVOLVED 3. POLITICAL UNWILLINGNESS T O CHARGE FOR RWS. RECOMMENDATIONS 1% OF THE OUTLAY (TO BE RAISED TO 5% OVER TIME) IN RWSS SECTOR SHOULD BE EARMARKED FOR: - IEC -- AWARENESS PUBLIC EDUCATION CREATION - HEALTH EDUCATlON -HRD ACTIVITIES PROVISION SHOULD BE MADE IN THE LEGISLATION TO SET TARIFF IN ORDER TO COVER FULL O&M COST AND CAPITAL COST RECOVERY FOR OLD SCHEMES SUBSIDY SHOULD BE PHASED OUT WITHIN A PERIOD OF THREE YEARS FOR NEW SCHEMES THERE SHOULD BE S O SUBSIDY FOR OBM WITHIN FIVE YEARS, THE OBJECTIVE SHOULD BE TO SET THE TARIFF STRUCTURE TO COVER THE REPLACEMENT COST ALSO. 4. DEVOLUTION OF CONCOMITANT MANAGEMENT AND FINANCIAL AUTONOMY. RECOMMENDATIONS THE PRIs SHOULD BE FREE TO FIX THE TARIFF STRUCTURE SUBJECT TO MINIMUM LEVELS FOR DIFFERENT TYPES OF SCHEMES TO COVER THE O&M COSTS, CAPITAL COST CONTRIBUTION AND REPLACEMENT COST. THE REQUIREMENT OF FUNDS FOR PRIs IN THIS REGARD SHOULD B,E BROUGHT TO THE NOTICE OF STATE FINANCE COMMISSIONS SO AS TO PROVIDE FOR ADEQUATE DEVOLUTION OF FINANCIAL RESOURCES. 5. ABILITY OF CENTRALlSTATE GOVERNMENT TO IMPOSE CONDITIONALITY TO DRIVE SECTOR REFORM PROCESS GIVEN LACK OF POLITICAL SUPPORT RECOMMENDATION THE GOVERNMENT OF NDIA SHOULD IDENTIFY THE MMIMUM REQUIREMENTS FOR EFFECTIVE PERFORMANCE AND THROUGH DISCUSSIONS WITH STATE GOVERNMENTS OBTAIN THEIR CONCENSUS AND THEREAFTER IMPLEMENT THEM INSTITUTIONAL F ~ O R KSERVICE DELIVERY - RECOMMENDATIONS OF THE SUB-GROUP-I11 At the autset there is no reservation to change from a supply driven approach to demand driven approach, however the Sub Group felt that there are certain pre-requisities that might be necesary in this transition phase. Firstly the awareness has to be created among the users to come forward and participate as a community. In creating this awareness media, specialised NGOs and voluntary organisations can play vital role. The Sub Group deliberated and came up with following steps to devolution of adequate management autonomy and resources to the Panchayati Raj Institutions: 1. Formulation of a suitable legislation - it was felt that change in the system should be authenticated by a suitable legislation by every State so that Panchayats have sufficient authority to discharge the responsibility in the new scenario. For example, they must have the power to realise water cess, penalty the defaulters, etc. The framework of this legislation should be evolved by each State based on local conditions. 2. There is need to have a transparent policy in respect of the responsibility of the service agency as well as the rights of the users and the cost to be shared by them. This policy also may have regional variations. The Sub Group feels that such a policy should be evolved by the States themselves. 3. The Group recommends the following steps to be followed in planning and execution of a water supply scheme. a) Preparaing a inventory of all the water sources in consultation with villagers b) Carrying out the pre-feasibility level study and to zero on the preferred options. c) Preparaing engineering design comprising of the salient features of the proposed schemes alongwith cost computation. d) Discussions with the users and informing them about their shared costs. e) Preparaing a formally conceptualised scheme followed by detailed engineering. f) Taking some token contribution as earnest money and signing of MOU between the service agency and the local body. g) Completion of remaining instalments of the Qsers contribution progressively with the implementation of the scheme. h) Tendering procurement of aaterials and implemen:.ati~n p.rocedures. i) Training of the maintenace agency / personnel: j) Accredition procedures for the maintenance personnel. k) Hygiene education to the users. i) Training in accounts, maintenance of inventory and other procedures 4. In implementation of the O&M it should -be choice of the users (village-level committees or scheme-level committees) either give this to government agency or any other agency. Proper quality control has to be ensured at every stage, for example, materials, construction standards, inspectia~n of third party may also be practised. Similarly on O&M (stage the Sub Group felt that third party inspection / auditing should be encouraged to have an idea of the level of quirlity of service being provided by the service department. The Sub-Group shared their concern regarding the cost recovery aspect whereas as a matter of principle the Sub- Group agreed that there should be some level of cost sharing by the end users and users should know of the scheme after they are translated to the ground. The Sub Group felt that there is need for adequate political will and motivation to the end user to change from the present scenario of free but inadequate service to paid and sustainable service. In conclusion, the Sub Group agrees that the approach presented in the draft report and recommends that the devolution and decentralisation of providing water setu4ces which are presently provided in a centralised manner. GROUP IV : WATER RESOURCES - WATER COLLECTION - TECHNOLOGY OPTIONS GROUND WATER LEGISLATION 1. There is an Urgent need for C-round Water Legislation to protect the quality -and sustainability of the drinking water sou~ces/aquifierskeeping in view the declining trend of the water levels. (i). Ground Water Legislation exists in one form or the other in some states, needs to be implemented. There is an urgent need for implementation in all the states. (ii) Indiscriminate exploiation of Ground Water needs to be controlled by Government order. Heavy Penalty be imposed for Non-compliance. (iii) The Ground Water Legislation be implemented as early as possible preferbly within one year. NATIONAL WATER POLICY (i). National Water Policy clearly spells out the overriding priority of drinking water in inter-sectoral allocation. State water policy to adopt a similar approach. (ii) A State level Water Resources Management Committee at the highest level needs tc be constituted to oversee the implementation of state water policy. ACTION PLAN : Each state w1ll work out the overall availability and demand of water for all sectors. The ,requirement for drinking water should be ensured based on cost benefit analysis and socio-economic considerations. Short, Medium and Long term planning for the overall water management be adopted. 3 . WATER CONSERVATION AND MANAGEMENT KEEPING IN VIEW SUSTAINABILfTY OF TKE WATER RESOURSES : - (i) Unintelligent and over use of water resourses water wastage be avoided in all sectors. (ii) Ground Water recharge programme be strengthened. (iii) Conjuctive use of ground and surface water be encouraged. (iv) All efforts be made for adoption of apprlopriate technologies for preventing evaporaticn and seapage losses in all areas specially in drought prone areas. V) In coastal areas where ground water salinity is increasing, cround water extracition be stopped immediately and appropriate tc.=hnological measures to be adopted for preventing inqress of sa inity. (vi Wherever ground water/surface water quality is polluted due to enhanced agricultural and Industrial advancement, apprr~riatetechnological measures to be taken to prevent and contr~lpollution of water sources. 4. ENVIORNMENTAL CLEANLINESS AROUND WATER SOURCES. (i) Sanitary protection to all water sources be ensured. (ii) Sanitary surveys of all drinking water supply sources should be carried out and appopriate measure be taken to protect the sources. (iii) Sanitation upqrading approach for preventing pollution of water sources be adopted. (iv) Surface drainage, sullage water should be suitably disposed off without polluting drinking water sources. (v) Drinking water quailty survellance witlh active involvement of the community to be adopted by the department of health to prevent and cont:-01 water and sanitation related diseases and that should be a part of the drinking water surve!llance programme. 5. COST EFFECTIVE, USER AND ENVIRONMENTAL FRIENDLY TE-OLOGY. (i) Traditional water sources, wherever feasible, be adopted and protected with appropriate technology using locally avisilabie materials and skills. (ii As chemical contaminants in water sources are on the increase, e.g. flouride, frsenic, salinity, Iron etc, appropriate and effective eco-friecdly technogical measures should be adopted. (iii) Infrastructural development and capacity bui1di:ng for water quality control by the prourder agencies be strengthened. (iv) An interministerial Group be constituted to examine the existing National Drinking Water Quality Standards and reczommend any changes, if required. CONSTRAINTS,: 1. No control over Ground Water Exploitation 2. Aw~reness on water conservation and management along :he community is inadequate' 3. Deterioration of the quality of water resources 4. Inadequate adoption of commu~ity based cost effective technology (IES) REMEDIAL MEASURES :- 1. Immediate enactment and implementation of Ground Watcr Legislation 2. IEC support to be-strengthened 3. Quality control of water sources and surveillance mec .lamsm with involvement of community to be strengthened 4. Popularization and adoption of cost effective ccxmunity based technology. ANNEX 2 Selective List of Persons Met Government of India Mr. Vinay Shankar Secretary, Ministry of Rural Areas & Employment Ms. Krishna Singh Adviser,Planning Commission Mr. P. Mohandas Director, Rajiv Gandhi National Drinking Water Mission (RGNDWM) Mr. Arun Kumar Additional Secretary, Ministry of Water Resources Mr. D. N. Raju Deputy Secretary, Dept. of Econ. Affairs, Ministry of Finance. Mr. D. K. Bhalla Deputy Secretary, RGNDWM Mr. A. R. Subbiah Deputy Secretary, RGNDWM Mr. K. Mazumdar Assistant Adviser, RGNDWM Mr. C. Ganapati Deputy Adviser, RGNDWM Mr. V. Raghu Deputy Adviser, RGNDWM Mr. R. M. Deshpande Assistant Adviser,RGNDWM Mr. D. Chandi Assistant Adviser, RGNDWM Mr. K. Moorty Assistant Adviser, RGNDWM Dr. Shusheela Consultant, RGNDWM Mr. I. C. Agganval Consultant (TM), RGNDWM Mr. R. K. Jain Consultant (MIS), RGNDWM Mr. J. Chandar Consultant (TM), RGNDWM Mr. P. C. Sharma Research Officer, Ministry of Rural Areas & Employment Mr. D. Kittu Chief Hydrogeologist, Central Ground Water Board Mr. Z. Hasan Member, Central Water Commission Mr. R. P. Sharma Adviser, Ministry of Environment & Forestry Mr. Unnikrishnan Deputy Secretary, Ministry of Health Mr. B. B. Uppal Deputy Adviser, Ministry of Urban Areas & Employment Government of Maharashtra Mr. V. Ranganathan Principal Secretary, Water Supply Department Mr. S. V. Shelkikar Chief Engineer, Maharashtra Water Supply &Sewerage Board Ms. Malini Shankar Director, PPMU, Maharashtra RWSS Project, Mr. S. K. Patil Chief Engineer, Maharashtra RWSS Project, Mr. S. V. Wagh Superintending Engineer, Maharashtra WSS Board Government of Punjab Mr. B. Singh Secretary, Public Health Education Dept. (PHED) Mr. Aurora Secretary, Local Government and Urban Affairs Mr. B. R. Bansal Chief Engineer, PHED Mr. A. Singh Dhillon JointDirector, Rural Development Department Mr. T. R. Aurora Superintending Engineer, PHED Mr. K. J. Rai Superintending Engineer, PHED Mr. S. S. Ubhi Superintending Engineer, PHED Government of Kerala Mr. B. John Minister for Irrigation and Water Supply, GOK Ms. Krishna Veni Managing Director, KeralaWater Authority (KWA) Mr. V. Kurian Accounts Member, KWA Mr. S. M. Vijayanand Special Secretary, Panchyati Raj Mr. T. Ram Meena JointSecretary, Water Supply Mr. A. K. Apooty Director of Panchayats Mr. R. Nair Add'l Development Commissioner, Rural Development Mr. S. M. Vijayanand Special Secretary, ~ a n c h a ~ a t i ~ a j Government of Karnataka Mr. M. R. Srinivasamurthy Secretary, Department of Rural Development Mr. S. M. Panchagatti Secretary, Irrigation Department Mr. M. R. Vijaykumar Director, PPMU Mr. K. B. Basappa Director, Panchayat Raj Mr. G. M. Vijaykumar Superintending Engineer (acting CE), PHED Mr. Shrirol JointController, Finance Mr. V. Rao Chief Engineer, Irrigation Department Government ofWest Bengal Mr. M. N. Roi JointSecretary, Finance Mr. S. N. Ghosh Principal Secretary, Rural Development &Panchyat Raj Mr. Prasad Ray Secretary, PHED Mr. D. M. Kanwar Secretary, Minor Irrigation Department Mr. A. K. Gupta Principal Secretary, Finance and Planning Mr. Mukerjee Chief Engineer, PHED Government of Uttar Pradesh Mr. R. B. Bhaskar Secretary, Urban Development Department Mr. V. K. Gupta Chief Engineer, UP Jal Nigam Mr. J. A. Jain Chief Financier, UP Jal Nigam Mr. P. Iyer Special Secretary, Department of Rural Development Mr. Kawatra Principal Co-ordinator,State Planning Commission Mr. S. Sanyal Secretary (Management),UP JalNigam Mr. S. Deshpande Joint Secretary, JhanaPrabodhini Mr. J. P.Shukla Unit Co-ordinator -HRD, UPRWSES Project Mr. V. K. Aganval Unit Co-ordinator -Technical Unit, UPRWSES Project Government of Rajasthan Ms. Krishna Bhatnagar Principal Secretary, PHED Mr. B. K. Gupta Chief Engineer, PHED NGOs Mr. Acharya Director ,Action Aid Mr. Y. P. Singh Director, Sulabh Ms. Sheela Pate1 Director, SPARC Mr. Jatin De' Director, PSU Foundation Mr. Raghu Kumar Director Programme, Samuha Mr. C. C. Dey Ramakrishna Mission Mr. Raj Kumar Daw NAWDA Dr. Balachandra Kurup Executive Director, SEU-Foundation, Kerala Mr. C. Murugan Center for Development Studies, Trivandrum Sector Agencies,Donors and Programmes Mr. Rupert Talbot Chief, UNICEF Water,Environment and Sanitation Section Mr. Care1D. L. Brands Netherlands Embassy, First Secretary Mr. Avinash Zutshi Netherlands Embassy, Programme Officer Mr. JensBjerre Danish Embassy, Councillor - Development Mr. Ian Curtis ~ i r sSecretary, Dept. For Int'l Development (DFID, ex-ODA) t Ms. Tamsyn Barton First Secretary, DFID Project Implementation Units Danida-assisted Rural Water Supply and Sanitation Programme, Karnataka DFID-assisted Rural Water Supply and Sanitation programme, Maharashtra WB assisted RWSS Projects in Maharashtra, Karnataka and U.P. Dutch-assisted project in Karnataka World Bank & UN organisations(India Offices) Mr. G. V. Abhyankar Sanitary Engineer, WB- N. Delhi Mr. S. Sarkar Sanitary Engineer, WB- N. Delhi Mr. JohnWilliamson RegionalChief Economist,SASVP Mr. M. Whitbread FinancialAnalyst,WB- HQ Ms. Jennifer Sara Sociologist,WB - HQ Ms. Letitia Obeng Water and Sanitation Engineer, WB -HQ Mr. Benoit Blare1 Economist, WB -HQ Mr. R. Kvam Anthropologist, WB-HQ Mr. R. Robelus Environmental Specialist,WB -HQ Mr. W c C a r t e n Public Finance Economist, WB - HQ Mr. Mike Garn Economist, WB-HQ Mr. Brian Grover Manager, UNDPIWBWater and Sanitation Group (WSG),Washington Mr. Robert Boydell Manager-South Asia, RegionalWSG-South Asia (RWSGSA) Ms. Barbara Evans Sanitary Engineer,RWSGSA Rural Credit Institutions Mr. Bal Godbole Chief Service I1 (retd.), FA0 Mr. S. D. Rajhansa ExecutiveDirector (retd.), NABARD Mr. P. S. Rana Executive Director, HUDCO REFERENCES A. F. Ferguson &Co., 1992. KeralaWaterAuthority Cost and Nayan, 1995."The Contribution ofPeopLtasRwticiptian: Revenue Study. Vol. 11-B: Report on Household Field Evidencefrom 221RuralWater SprppEyrbjedsedsh Enai- Study. ronmentallySustainableDePPeEopmmtIkpt.Ckasbd Bagchi, Arnaresh,et. al., 1992. StateFinancein India. Paper 1.Washington, BC: W i dBank,Pr~csxd. BengalState FinanceCommission,1995. Recommendations NationalCormrmcilofAppliedEmnomicResrmch[B&M is- of State FinanceCommission. sues). indian~ a r k eDemogaphis. t Briscoe, John and HarveyA. Garn, 1995."Financing Wata O o m e n M.A. e t d., 19%. Panchapti Raj kv&pmmt Supply and Sanitation under Agenda 21," in Natural Report1396. Ddhi: InstitutesfSo&I Sciences ResourceForum 19(1):59-70. Oommen, M.A, and Abhijit Dam I S - h&mmd Datta, Abhijit,1992. "Local Government Finances: Trends, Their Finances.Delhi: Institute ~ f S m 3Sciences d Issues,and Reforms." pant,s.K, 19%. =~ural wawsuppaymd s&* Ghosh et. al., 1995. WaterSupplyinRural India. forReorientingApproach to Keyhuesh Government of India, 1992.1991 Census. Rivera, Daniel, 19%. "Private Seetar M i ~ p a t i In~the o Government of India, 1994a.Reportof the Expert Commit- WaterSupply andWistewater !ik~tot.~ teeon RuralWaterSupply. NewDelhi: RajivGandhi Na- RWSESAIUNICEF. Integrated Sanitation Project tional Drinking Water Mission,April. Midnapw, CASELET'2 D-&ion Notes Government of India, 1994b.Report on ValidationSurvey. U n i d Nations Devel~prnentProgramme, kW3.Human New Delhi: Rajiv Gandhi National Drinking water DevekbprnentRepart NewYork Mission. United Nations Dedapmmt Programme, 1W5. Dedbp Government of India, 1994c. Survey Status Report. New ment Cooperation-India 1895.NewYr~rk Dehi: Rajiv Gandhi NationalDrinkingWater Mission. West k n g d State Finance CoEnmissian, l!?%.Recnmem- Government of India, 1994d. National Sample Survey on dations of theStateFianceCammksjan,W& Bagat. Consumer Expenditure-50thRound (1993-94): New WorldBank, 1994."&mudReviewof PorPBah P e & m Dehi: Department of Statistics, Ministry of Planning E93."Washiin@on.DC.: WorldBank,T m ~ m t i a n ~ and PrograrnineImplementation. Water,and UrbanDevelopmeatDepairment Pmqss& Government of India, 1994e. Report of the Tenth Finance April Commission. Tenth FinanceCommission. World Bank,19%. Environment DepartmeatIZissmkatkra Government of India, 1996. Draft Working Group Report Notes, No. 48. Washington, DCPTgmssecE,Aagmt- on RuralWaterSupplyandSanitation for the Formula- WorldBank, 1W6ahdla amtryEcanomicMenromdmn- tion of Ninth Five-Year Plan. New Delhi: Rajiv Gandhi Washington, DC. NationalDrinking Water Mission. World Bank, 1996b. The Mtarld Banlr Participation Governmentof India,1996. EconomicSurvey 1995-96. New Sourcebook. WAington, DC. Dehli. WorldBank, 1998a."Intersectoral WaterMocatbnlW&g Government of India, 1996. Financial Aspects of Rural and and Management Repart,=under the hdia Water R e Urban WaterSupplySchemes. NewDelhi: Central Wa- sourcesManagement SeetorReviewRagram.Wishing- ter Commission.Report 4/96. ton, DC: WorId Bank, South Asia R u d Development Government of India, 1996. Ninth Plan Report. New Delhi: Unit. WorkingGroup for the Formulationof the Ninth Five- World BankI1998b."Groundwater ReguIationand Manage- Year Plan. ment Report,"under the India water Resources Man- Khatri, Rajkumar,1994."Integrated Rural Water and Envi- agement Sector Review Program. Vfashington, DC: ronmental Sanitation Project, Karnataka. Project Study World Bank,South AsiaRural Develolpment Unit Report."Washington,DC: World Bank. Kurt, K. Balanchandraet. al., 1996."The Community-Man- (Note: The above two reports were subsequently published aged Sanitation Program in Kerala. Learning from Ex- by the World Bank and Allied Publishers in 1999 under the perience." International ReferenceCentre and Interna- South Asia Rural Development Series;IndinWater Resources tionalWaterand Sanitation Centre. Management.) 85